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| 0 9800 Let us design a stock option strategy from scratch for a hypothetical education startup. | |
| 9800 14280 They are just getting started and plan to develop high-quality digital education content | |
| 14280 15280 for schools. | |
| 15280 20360 They have two co-founders, Margal and Catherine. | |
| 20360 25480 Both of them have been passionate about education for a very long time and wish to contribute | |
| 25480 28920 to the education conversation worldwide. | |
| 28920 33680 They incorporate a company with 10,000 equity shares to begin with. | |
| 33680 38120 Since they both are software engineers, they start to build their education application | |
| 38120 42120 together without hiring anyone else just yet. | |
| 42120 47520 A few months down the line, with the product built to a reasonable extent, they feel they | |
| 47520 52960 need to hire a couple of junior engineers to help them speed up the development, and | |
| 52960 58000 very importantly, also someone for sales and marketing. | |
| 58000 63480 They plan to sell their product to educational institutions so they need someone experienced | |
| 63480 65640 in B2B sales. | |
| 65640 70880 They know the digital education domain is quite crowded, but they wish to build a product | |
| 70880 76520 that though digital has a unique manner in which the content is delivered. | |
| 76520 81920 They also have a separate section for teachers to help them upskill so they can use the content | |
| 81920 82920 effectively. | |
| 83080 88400 They are not trying to replace the teachers but to train and empower them. | |
| 88400 94680 After a lot of deliberation, they agree that the vision of empowering teachers resonates | |
| 94680 96440 very strongly with them. | |
| 96440 102440 This is their non-financial vision that energizes them to come to work every morning, and they | |
| 102440 109240 would like to have such people on the team who are also energized by such a vision. | |
| 109240 115160 They also agree that apart from integrity and professionalism, a core value they would | |
| 115160 120960 want to have in their team members is warmth and compassion. | |
| 120960 126880 The definition of their values and a non-financial vision provides them with clarity in terms | |
| 126880 130520 of the kind of people they would like to have on the team. | |
| 130520 135800 For instance, they are now clear that someone who is very well connected in the education | |
| 135800 143600 ecosystem is experienced in B2B sales, but bears a loud and a slightly domineering attitude | |
| 143600 148680 may not be the right fit for the culture they would like to create. | |
| 148680 154440 Now they are also not looking for people who merely have their relevant experience or are | |
| 154440 160000 passionate about education in general, but those who would be excited about empowering | |
| 160000 163080 teachers in particular. | |
| 163080 167760 As they begin their search, they are also aware that they cannot afford to pay market | |
| 167760 169560 salaries. | |
| 169560 174760 Once they find the right people who are inspired by their values, vision and culture, they | |
| 174760 179360 would also need to incentivize them financially using stock options. | |
| 179360 181720 So they need to note two things. | |
| 181720 188800 One, they intended benefit for each such role over four years, and two, their financial | |
| 188800 195680 projections to determine how much profit one equity share would provide in four years. | |
| 195680 196680 Let us do that next. | |