Friends,

Today’s edition hit’s on an area many of you will have experienced both personally and professionally — equity.

In general, my experience with equity (as an employee) has been pretty average at most places I’ve worked:

I’m sure you have many more to add to this. So in todays’ edition I’m exploring three companies that are turning the model on it’s head and doing something different to combat many of the gripes that face one of the most expensive programs a company can run.

Enjoy ✌

Matt

In case you’re new here (or just missed it) here’s the past three editions of the FNDN Series:

New research from HiBob surveyed 4,700 managers and found what most People leaders already suspect → managers are spending more time stitching together data from HR and Finance systems than actually acting on it.

They want to make pay decisions that are fair and financially responsible. 

But when salary bands live in one tool, headcount budgets in another, and performance data in a third, the real output is rework, not decisions.

HiBob's report breaks down what happens when you bring HR and Finance data into one system, and why the organisations doing it are retaining more talent, reducing rework, and building a trusted foundation for AI.

Know a startup Head of People looking for answers 🙋 why not forward this to them for some instant karma? ✨

Equity is supposed to align everyone, turn employees into owners, give people a reason to care beyond their pay cheque.

But for most startup employees, it does none of those things. The proof is in the numbers — the most damning one? That 76% of all stock options go unexercised.

Carta's Employee Stock Options Report had some astounding findings:

So, we have a compensation tool that most people don't understand, many can't afford to access, and that an increasing number discount to zero.

Nearly 60% of tech professionals now prioritise salary over equity when considering job offers.

And yet, 84% of employees still believe equity compensation is the most effective way to motivate a workforce.

The desire for ownership is real. The delivery system is what's broken.

If you're a Head of People at a scaling startup, your equity program is probably your single largest non-cash compensation cost. And there's a good chance it's underperforming.

I’m going to walk through three companies approaching this differently, each tackling a different failure point.

CHI Overhead Doors is a garage door manufacturer with about 800 employees, mostly factory-floor and truck-driving workers. When KKR acquired the business in 2015, morale was low. Employee surveys had a 30% response rate. 14% of staff sustained a reportable injury each year. They'd bounced through four private equity owners and expected nothing to change.

KKR partner Pete Stavros made every employee an owner. Equity was granted as a free, incremental benefit (not in exchange for wages), with a minimum payout of $15,000 if the company hit its targets. Wages still went up 12.5% in 2021 and 7% in 2020 on top of the equity, because it was important that this wasn’t an “either, or” exercise.

But they didn't just hand out equity and walk away.

KKR set aside $1 million a year for capital improvements chosen by workers (first request: air conditioning for the factory floor). They tied metrics to tangible rewards and paired it with 12 months of pre-paid financial coaching through Goldman Sachs and Ernst & Young.

It changed how people showed up.

Truck driver Larry Beal, who'd invested $5,000 of his own money, pointed out his delivery route was wildly inefficient. Before owning equity, he was paid per mile and would have driven in circles. As an owner, he could see the route wasn't profitable.

The results speak for themselves:

Most incredible of all — when KKR sold CHI for $3 billion in 2022, 800 employees shared $360 million in payouts.

The average payout was roughly $175,000. The longest-serving employees earned up to $800,000.

When Stavros announced the news on the factory floor, some workers fell to the ground in tears. One cried out: "My kids are going to college!"

If you're granting options or RSUs but haven't paired them with education and a real feedback loop, you're leaving value on the table.

As HBS Professor Ethan Rouen put it: getting employees to engage with the day-to-day is about how people relate to the company. Equity without culture work is just paperwork.

Gamma is an AI presentation platform that hit $100 million ARR profitably with about 50 employees and a $2.1 billion valuation. CEO Grant Lee's motivation for prioritising employee liquidity is personal.

He borrowed over $200,000 to exercise stock options at his previous startup, Optimizely. But When the company was sold, he didn't make his money back.

Someone who helped build a company, took the financial risk, and still came out behind. With scenario's like this being common place, who can blame employees for being skeptical about equity?

That experience shaped Lee's approach at Gamma, and was an experience he wanted to avoid. During the Series B, the company included a $20 million secondary offering for early employees. It then completed its first formal tender offer, allowing about 30 employees to sell up to 20% of their vested equity in a $44 million deal.

This is part of a bigger shift. Nasdaq Private Market executed nearly $15 billion in tender offer volume in 2025, up from about $3 billion in 2023. Morgan Stanley found that 59% of private company decision-makers report increased pressure from employees to hold a liquidity event.

What made Gamma stand out was capital efficiency. They raised only about $90 million total to reach double-unicorn status with 50 people. By not diluting heavily, each employee's equity was genuinely worth something. And by running a structured tender offer, they made that value accessible without waiting for an IPO that might never come.

You don't need to be a unicorn to explore secondary sales or structured buybacks. Even having a conversation about your liquidity timeline signals equity isn't theoretical.

If your people can't see a path to accessing what they hold, you're asking them to take it on faith.

Athyna is a global talent platform running about 60 people remotely. Founder Bill Kerr took a first-principles approach to equity: he allocated 20% of the fully diluted cap table to employees from day one, and he chose RSUs over stock options.

Bill's motivation was personal. He'd watched the traditional option model fail people up close, and he wanted equity that actually changed lives, not equity that sat in a portal collecting dust.

His philosophy on who gets it is deliberately broad: interns to executives. If someone works hard at Athyna and does enough time for their stock to vest, they deserve to be rewarded. That meant the mechanism had to match the ambition. Athyna runs a fully remote team across nearly every continent, with many employees in emerging markets where asking someone to produce thousands of dollars to exercise options is a complete non-starter. Traditional stock options were a dead end before he even started.

As he put it on the Cake Equity podcast: "What fires me up the most is changing the financial future of our team."

The difference between RSUs and options matters. With traditional stock options, employees must pay to exercise, can face tax bills that dwarf the strike price (Secfi found the average client needed $543,000 to exercise, with roughly $395,000 going to taxes), and have just 90 days to exercise after leaving.

The more the company's value grows, the more expensive it becomes to access your own equity.

With Athyna's RSU model, no one pays a cent up front. A double-trigger clause defers taxes until cash is in hand. Everyone, from interns to executives, gets equity.

No exercise process, no tax trap, no 90-day scramble.

The results were clear:

Bill didn't initially know the difference between the forms of stock. He learned, and chose the structure that worked for his people.

If your equity program requires employees to spend money they don't have on shares they can't sell, you've built a benefit that benefits no one.

CHI fixed the culture gap. Gamma solved for liquidity. Athyna removed the cost barrier. Your startup probably has at least one of these issues.

Most equity programs were designed when companies went public within seven years. That era is over. Companies stay private longer (12+ years now), employees are more sceptical, and "lower salary, bigger upside" is losing its pull.

Audit your program:

If the answer to any of those is no, you've got work to do. It doesn't have to be complicated. It just has to be intentional.

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A roundup of the most interesting stuff from the week:

When you’re ready, here’s three ways I can help you:

1. Tools & resources
Resources and tools that give you what you need to build your own startup compensation practices.

2. Comp consulting
I run FNDN, a global comp consultancy that builds compensation practices that are clear, fair and competitive for startups.

3. Startup People Summit
I run the Startup People Summit, a one day annual event focused on creating the playbook for startup people practices. Grab recordings from past events, or subscribe to the newsletter to join the next event.