🔎 ESOP fine print

There’s a simple equation that drives many people to work at startups. In exchange for accepting less pay and possibly working harder than you would at many big companies, you get on an employee stock option plan (ESOP) that may one day make you quite rich.

Scores of early Canva employees who became overnight millionaires in its secondary share sale are a good recent example.

Yet Canva’s case also illustrated that there are strings attached. Break one of the company’s non-disclosure agreements (NDAs) and your equity can crumble with it, according to documents we’ve seen.

At some startups, staff don’t even have to break any rules for the value of their equity to be threatened.

I spoke to an ex-employee of a reasonably prominent startup who discovered their contract’s leaver clause locked the worth of their equity to “fair market value” on the date they left the company.