What kind of conditions can I set?

Ideas for the different goals and milestones you can set to motivate recipients.

Option schemes, growth shares and Agile Partnerships allow you to set time and performance-based conditions that recipients must meet to earn their equity. 

Vestd lets you set all types of conditions, so you can design a scheme that aligns with your business goals. But here are a few popular examples... 

 

Time-based conditions

  • Be part of the team over a certain period or at a certain date
  • Stay with the business post-acquisition during an earn out period
  • Work for X days / weeks per month (useful for non-executive directors and consultants)
Financial conditions
  • Generate £X in sales (can be tiered)
  • Deliver client work valued at £X or above
  • Profit goal reached
  • Positive profit margin
  • Revenue goal reached
  • Revenue + gross margin target reached
  • Revenue run rate above £X per month for an agreed period of time
  • Generate £X of new business
  • Generate £X in upsells
  • Maintain or reduce churn rate
  • Reduce costs
Value-based conditions
  • Business worth X at a certain date
  • Business sold for X

Output-based conditions
  • Deliver an agreed project
  • To create X blog posts a month
  • To meet KPIs
  • Number of referrals

Funding conditions
  • Secure £X of funding
  • Options issued after funding round

Participation conditions
  • Complete X actions / activities
  • Refer X users to the platform
  • Achieve an average rating of X
  • Achieve an engagement score of X

 

Another format that's becoming more popular on the Vestd platform is tiered conditions, where the better a recipient performs, the more equity will become unconditional. Here are a few examples... 

 

Time-based tiered conditions 

  • Work an aggregate of at least 20 hours but less than 30 hours per week from the date of DD/MM/YYYY to DD/MM/YYYY for 100 shares to become unconditional. 
  • Work an aggregate of at least 30 hours but less than 40 hours per week from the date of DD/MM/YYYY to DD/MM/YYYY for 200 shares to become unconditional. 

Generated revenue tiered conditions 

  • Generate between £50,000 and £99,999.99 of new annual recurring revenue between DD/MM/YYYY and DD/MM/YYYY for 500 shares to become unconditional.
  • Generate between £100,000 and £499,999.99 of new annual recurring revenue between DD/MM/YYYY and DD/MM/YYYY for 1,000 shares to become unconditional.

Exit value tiered conditions 

  • If the business is valued between £1,000,000 and £2,000,000 at exit, 100 shares will become unconditional. 
  • If the business is valued between £2,000,000 and £5,000,000 at exit, 200 shares will become unconditional. 

As you can see, you have total control over the structure of your conditions with flexible solutions to reward recipients for hitting business goals. 

 

Our team, content and app can help you make informed decisions. However, any guidance and support should not be considered as 'legal, tax or financial advice.'