Create a ESOP for your company | Try our ESOP technology on Clara

Granting and managing options is a breeze with Clara.

ESOP in minutes 

Complete the process digitally in a few clicks, including Board approvals.

Automated vesting schedules 

Every time you issue a grant, the vesting schedule will automatically appear on your cap table with all the math done for you.

Built-in  exercise notices

You’ll be reminded of upcoming vesting dates and Clara will pre-populate exercise notices – ready to be signed by your team members.

Easy onboarding

Make ESOP allocation a seamless part of your onboarding process. Generate grants for new team members in a few clicks with everything signed through the platform.

How to put in place your ESOP

/06

Login

/06

Generate your option plan

Click the blue (+) button, choose the relevant jurisdiction from the dropdown and select Share Incentive Plan or Equity Incentive Plan for Delaware.

/06

Complete the form

Complete each field in the form and select your various options, including the pool of shares you want to set aside for your ESOP.

/06

Adopt the option incentive plan 

Once you generate the plan, you can save it in draft, edit it and when final, send it for signature through our built-in DocuSign integration. It will be signed by way of a board resolution adopting the plan (the actual plan itself is not signed). Clara will take care of all that for you.

/06

Repeat for grant agreements 

Now that your plan is in place and ESOP pool set aside, you can start issuing options to team members. Just go back to the Generate Documents tab, select Grant Agreement, complete the form and sign it when you’re ready.

/06

Arrange for exercise notices 

Clara will automatically remind you when an upcoming vesting date is near and pre-populate an exercise notice ready for your team member to sign and send back to you, right on the platform.

Frequently asked questions

We have put together some commonly asked questions

What’s the purpose of an ESOP?  : An ESOP helps you attract, incentivize and retain team members, and empower them as part-owners aligned with the interests of your company. ESOPs tend to be especially important for early-stage companies given the inherent risks and lower salaries associated with these
types of roles.

When should I put an ESOP in place?  : Every situation is different. It generally makes sense to have one as soon as you feel you need to start attracting talent and hiring and growing your team.

Do recipients of options under an ESOP have to pay money to exercise them? : This depends on how you choose to structure your ESOP and there are important tax implications both for your company and team members, so please always obtain professional tax advice (and your team members should too). However, it is common for some payment to be made, either based on the fair market value of your company at the time the grant of options was made – more typical for jurisdictions with tax – or at the very least the par value of the shares (a small nominal amount that is typically between US$0.001 to US$0.00001 depending on the jurisdiction) as this is usually a legal requirement – more typical for low or no tax jurisdictions.

What rights does a holder of options under my ESOP have? : While they hold only the options, their only rights will be the right to exercise the options as they vest and receive the corresponding shares. Once they become shareholders, the rights they have will depend on how you choose to structure your ESOP. It’s not uncommon to give very few little rights, including no voting rights, as the main purpose of the ESOP is to provide economic incentives and not governance rights.

What happens to the ESOP options if the company is sold?: While options remain outstanding subject to vesting, you have to look at your “acceleration” provisions. The most typical ones are “single-trigger acceleration” which immediately accelerates all vesting so that your team members take all their shares immediately prior to the sale and can sell them at the same time as the sale or “double-trigger acceleration” which means that a team member’s vesting schedule continues as is under the new buyer and would only accelerate if their engagement is terminated as part of the sale or within a period of time after (typically between 6 to 12 months).

Equity Management • ESOP

Build and manage your ESOP on Clara