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A Piece of the Pie: Equity Compensation For Emerging Technology Companies  April 6, 2011 Theo Sharp Managing Director,  Pearl Meyer & Partners [email_address] (508) 630-1498 Christine Moore Vice President Pearl Meyer & Partners [email_address] (508) 630-1491
Considerations in Determining Equity Compensation ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Old Paradigm Compensation / Exit ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
What has changed? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Addressing New Dynamics ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
New Pay Paradigm Time Horizon to an Exit Event ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Up to Three Years Three to Five Years Five Plus Years
Competitive Equity Holdings – General Guidelines Data from  Dow Jones Compensation Pro Level Total Equity Participation at various Stages of Development (Fully Diluted) Early Stage (Post First  Round Financing) 25 th  – 75 th  percentiles Mid-Stage (Post Second  Round Financing) 25 th  – 75 th  percentiles Later Stage 25 th  – 75 th  percentiles Founders 2.00% - 10.50% 2.00% - 9.00% 1.75% - 8.50% CEOs 4.00% - 7.00% 3.50% - 6.50% 2.00 – 5.00% Executives 0.65% - 2.25% 0.50% - 1.10% 0.50% - 1.00% Directors 0.20% - 0.50% 0.10% - 0.30% 0.10% - 0.30% Managers 0.05% - 0.20% 0.05 – 0.10% 0.05 – 0.10%

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Pearl Meyer on Equity Compensation

  • 1. A Piece of the Pie: Equity Compensation For Emerging Technology Companies April 6, 2011 Theo Sharp Managing Director, Pearl Meyer & Partners [email_address] (508) 630-1498 Christine Moore Vice President Pearl Meyer & Partners [email_address] (508) 630-1491
  • 2.
  • 3.
  • 4.
  • 5.
  • 6.
  • 7. Competitive Equity Holdings – General Guidelines Data from Dow Jones Compensation Pro Level Total Equity Participation at various Stages of Development (Fully Diluted) Early Stage (Post First Round Financing) 25 th – 75 th percentiles Mid-Stage (Post Second Round Financing) 25 th – 75 th percentiles Later Stage 25 th – 75 th percentiles Founders 2.00% - 10.50% 2.00% - 9.00% 1.75% - 8.50% CEOs 4.00% - 7.00% 3.50% - 6.50% 2.00 – 5.00% Executives 0.65% - 2.25% 0.50% - 1.10% 0.50% - 1.00% Directors 0.20% - 0.50% 0.10% - 0.30% 0.10% - 0.30% Managers 0.05% - 0.20% 0.05 – 0.10% 0.05 – 0.10%