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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.