Financial Planning for Startups

This is the exact framework that helped many founders grow companies and exit with more than 50% ownership 95% of startups raise money at the wrong time. They either raise too early and dilute unnecessarily, or wait too long and run out of cash. After working with 100’s of founders, here's the exact roadmap that separates winners from casualties Stage 1: Bootstrap Phase (₹0 - ₹50L Revenue) ⤷ Focus entirely on product-market fit ⤷ Keep burn rate under ₹2L monthly ⤷ Validate unit economics with first 50 customers ⤷ Don't even think about external funding yet ⤷ Use personal savings, family money, or revenue to grow ⤷ Hire only essential team members (2-5 people max) Stage 2: Revenue-Based Debt (₹50L - ₹2Cr Revenue) ⤷ You have proven PMF and positive unit economics ⤷ Monthly revenue growth of 15%+ for 6 consecutive months ⤷ CAC payback period under 12 months ⤷ Customer retention above 85% ⤷ This is where debt financing makes perfect sense ⤷ Raise 6-12 months of runway to accelerate growth ⤷ Use funds for marketing, not team expansion Stage 3: Growth Equity (₹2Cr - ₹10Cr Revenue) ⤷ Strong unit economics with LTV/CAC ratio of 3:1 or better ⤷ Clear path to ₹50Cr+ revenue within 3 years ⤷ Market size of ₹1000Cr+ that you can capture ⤷ Need significant capital for market expansion or R&D ⤷ Team of 25+ people with proven leadership ⤷ Only raise if you can 3x revenue within 18 months Stage 4: Scale Funding (₹10Cr+ Revenue) ⤷ Approaching or at profitability ⤷ International expansion opportunities ⤷ Acquisitions or new product lines ⤷ Series B/C rounds make sense here ⤷ You're competing for market leadership When NOT to Raise Money ⤷ You haven't proven product-market fit ⤷ Burn rate exceeds 50% of monthly revenue ⤷ Customer acquisition is broken ⤷ You're raising to extend runway without growth plan ⤷ Market size is unclear or too small ⤷ You can achieve next milestone with existing cash + revenue The Hard Truths ⤷ 80% of companies never need equity funding ⤷ Most successful companies are profitable by ₹5Cr revenue ⤷ Raising too early kills more startups than not raising at all ⤷ Debt is almost always better than equity if you qualify ⤷ Every funding round should 5x your valuation within 2 years Note: These figures are based on my experience and may vary across industries and markets. Use this as a framework, not absolute rules. Decision Framework Bootstrap → Build until ₹50L revenue with strong unit economics Debt → Scale from ₹50L to ₹2Cr while maintaining profitability path Equity → Only when you need ₹5Cr+ for rapid market capture The companies that follow this roadmap keep 60-80% ownership at exit. The ones that raise too early end up with 10-15%. Which path are you on? #startups #funding #bootstrap #debtfinancing #growth

As a founder, I have made a ton of mistakes, but fundraising I (mostly) got right. This includes securing $400 million for my own startups over the years, but also helping fellow founders successfully with their investment rounds. At the same time, I have seen founders run disastrous and failed funding processes. The big difference is a proper process. Running a proper process enabled us to select the best investors to help us most at each stage. I never chased the highest valuation. I focused on finding the investor who could solve our biggest challenges for the next two to three years of growth. That only worked because I ran a proper process. So, what does a proper process look like? Every founder will have a view, but in my experience it includes eight golden rules: 1. Nail the story - Most important, but hardest part. Define a maximum of two to three key messages. Repeat them everywhere, in calls, emails, and on every slide of your deck. 2. Build a tight deck - Every slide reinforces those two to three key messages. Slide titles should summarise the key point, not just say “Market” or “Product”. 3. Raise the minimum - Ask for as little as you need. Far better to oversubscribe than face a never-ending process or failure to hit the target. I much prefer raising to hit the next milestones, prove progress, then raise bigger later at a higher valuation. 4. Do not obsess over valuation - Too often, founders chase the highest valuation, which then bites hard later with a painful down round. Valuation is driven by timing, traction, and demand. Focus instead on your ideal investor, the one(s) who can help solve your biggest challenges over the next two to three years. 5. Kiss a lot of frogs - Build a wide funnel of at least 50 targets for an early-stage raise. Prioritise your ideal investors, but keep optionality until the very end. Use warm intros where possible, ideally at partner level. Do not contact anyone until 100% ready. 6. Craft a killer intro - Short email, four to five bullets on the key pain points and “why now?”. Keep it short and punchy so a warm contact can forward it without rewriting a word. 7. Run a tight process - Hit everyone at the same time to create momentum. Keep competitive tension throughout by trying to move everyone at the same speed. Assume at least six to nine months. Make sure you have cash runway for longer. Show traction and results throughout. It is a big commitment, half of a founder’s time. 8. Prep your data room early - Financials, cap table, corporate structure, FAQs, all ready before serious conversations begin. I will cover how much to raise, capital strategy, investor mix, and specifically what is different for climate tech founders next week. But the foundation is this: fundraising is a process. Run it like one. This is part of a weekly series on scaling lessons from building PropertyGuru to NYSE and backing climate ventures at Wavemaker Impact and Planet Rise. Follow along if useful.

🚀𝗜𝗻𝗱𝗶𝗮 𝗝𝘂𝘀𝘁 𝗔𝗻𝗻𝗼𝘂𝗻𝗰𝗲𝗱 𝗦𝗼𝗺𝗲 𝗦𝗲𝗿𝗶𝗼𝘂𝘀 𝗢𝗽𝗽𝗼𝗿𝘁𝘂𝗻𝗶𝘁𝗶𝗲𝘀 𝗳𝗼𝗿 𝗙𝗼𝘂𝗻𝗱𝗲𝗿𝘀 𝗶𝗻 𝟮𝟬𝟮𝟲 I spent some time going through the latest startup schemes that were announced, and honestly, this is one of the strongest pushes India has made for early-stage founders. If you’re building something in AI, education, hardware, deep-tech or even an early student startup, there’s real money on the table. And the best part is, a lot of this support comes without giving up equity. Sharing the ones that really stood out to me: 𝟭. 𝗡-𝗦𝗧𝗘𝗣 (₹𝟰 𝗟𝗮𝗸𝗵𝘀+) This is probably the easiest starting point for: • First-time founders • Early ideas • Student or campus startups It’s simple support to help you start building. 𝟮. 𝗜𝗻𝘁𝗲𝗿𝗻𝗮𝘁𝗶𝗼𝗻𝗮𝗹 𝗔𝗰𝗰𝗲𝗹𝗲𝗿𝗮𝘁𝗼𝗿 (₹𝟭 𝗖𝗿𝗼𝗿𝗲+) If you’re thinking global from day one, this is worth exploring. They help with: • Setting up in the US • GTM support • High-ticket funding Basically a shortcut to global exposure. 𝟯. 𝗘𝗗𝗨 𝗖𝗵𝗮𝗹𝗹𝗲𝗻𝗴𝗲𝗿 (₹𝟰 𝗖𝗿𝗼𝗿𝗲𝘀+) Anyone working on EdTech or skill development should look at this. There’s big support for: • EdTech products • Skilling platforms • Curriculum and learning innovation 𝟰. 𝗨𝗻𝗻𝗮𝘁𝗶 𝗔𝗜 (₹𝟯𝟬 𝗟𝗮𝗸𝗵𝘀+) This is huge for AI builders. Perfect for: • AI tools • SaaS + ML products • Automation + deep-tech ideas If you’re building anything around AI, this is free rocket fuel. 𝟱. 𝗡𝗜𝗗𝗛𝗜 𝗣𝗥𝗔𝗬𝗔𝗦 (₹𝟭𝟬 𝗟𝗮𝗸𝗵𝘀) This one is for hardware and IoT founders. You can actually get funding to build your prototype or MVP. A very practical scheme if your idea needs R&D. 𝟲. 𝗦𝘁𝗮𝗿𝘁𝘂𝗽 𝗜𝗻𝗱𝗶𝗮 𝗦𝗲𝗲𝗱 𝗙𝘂𝗻𝗱 (₹𝟱𝟬 𝗟𝗮𝗸𝗵𝘀) Designed for early-stage teams working on: • Prototype development • Product building • Market entry One of the most reliable government-backed supports right now. I’m sharing this because a lot of founders will be aware. If you’re planning to start something in 2026, this is genuinely the best time to prepare. If you want to discuss which scheme fits your idea, feel free to message me. Always happy to connect with other builders. #Startups #IndiaStartups #FounderCommunity #AI #EdTech #DeepTech #Innovation #Entrepreneurs #Funding #NIDHIPrayas #UnnatiAI #SeedFund #StartupEcosystem

The best founders don't just think about their next funding round. They think about their funding STACK. And honestly? This shift in thinking is the biggest pattern I'm seeing right now across SXSW Sydney - from FKS community chats, partner & investor conversations, coffee catch-ups with Tractor portfolio companies, and pretty much every other startup event I've been to lately too. It's like something clicked for founders in the last 12-18 months. 𝐇𝐞𝐫𝐞'𝐬 𝐰𝐡𝐚𝐭 𝐜𝐡𝐚𝐧𝐠𝐞𝐝: Founders used to see funding as this linear path: raise seed → burn through it → raise Series A. One round after another. Now they're architecting something completely different. They're building mixed funding stacks. 𝐖𝐡𝐚𝐭 𝐝𝐨𝐞𝐬 𝐭𝐡𝐚𝐭 𝐚𝐜𝐭𝐮𝐚𝐥𝐥𝐲 𝐥𝐨𝐨𝐤 𝐥𝐢𝐤𝐞? Think of it like this: you wouldn't build a tech stack with just one tool, right? You've got your CRM, your analytics, your payment processor, your comms platform. Each one does something specific at the right time. Funding works the same way. 🚜 The founders getting this right are layering different capital types strategically: → Equity capital for the big milestones (seed, Series A, Series B) → Non-dilutive capital for extending runway between rounds → Revenue-based financing when you've got predictable income → Bridge capital when you need 6 months to hit the metrics that'll 2x your valuation It's not about picking one. It's about knowing which lever to pull and when. 𝐈'𝐯𝐞 𝐬𝐞𝐞𝐧 𝐭𝐡𝐢𝐬 𝐩𝐥𝐚𝐲 𝐨𝐮𝐭 𝐝𝐨𝐳𝐞𝐧𝐬 𝐨𝐟 𝐭𝐢𝐦𝐞𝐬 𝐧𝐨𝐰: A founder raises their seed round. Hits $1.5M ARR. Has 8 months of runway left. They COULD raise their Series A now at a $10M pre. Instead, they add $400K of bridge capital. Extend runway by 6 months. Launch their enterprise tier. Hit $2.5M ARR. Then raise their Series A at $18M pre. ̲𝘚𝘢𝘮𝘦 $3𝘔 𝘳𝘢𝘪𝘴𝘦. 𝘉𝘶𝘵 𝘵𝘩𝘦 𝘥𝘪𝘧𝘧𝘦𝘳𝘦𝘯𝘤𝘦? 30% 𝘥𝘪𝘭𝘶𝘵𝘪𝘰𝘯 𝘷𝘴 16% 𝘥𝘪𝘭𝘶𝘵𝘪𝘰𝘯. On a $50M exit, that's $7M more in their pocket. All because they knew when to add a different type of capital to their stack. 𝐇𝐞𝐫𝐞'𝐬 𝐰𝐡𝐚𝐭 𝐈'𝐦 𝐬𝐞𝐞𝐢𝐧𝐠 𝐰𝐨𝐫𝐤: Founders are using non-dilutive capital to: → Buy time to hit the metrics that actually move valuation → Launch revenue-generating features before their next raise → Close enterprise deals they've been nurturing for months → Test profitability without needing to raise at all And the best part? None of this is about avoiding equity funding. Most founders I work with WANT to raise VC. They're building venture-scale businesses. But they're being strategic about when they raise and how much they give up. The mixed funding stack approach gives them options. And options mean you're making decisions from a position of strategy, not desperation. How are you thinking about your funding stack? (send me a DM if you’ve ever got questions on how Tractor Ventures may help!). 🙂

₹50 LAKHS GRANT FOR STARTUPS - YET 99% ENTREPRENEURS MISS IT As someone who has built businesses both from scratch and with institutional support, I can tell you one thing: knowing how to raise funds is just as important as having a strong idea. Right now, the Indian government is offering up to ₹50 lakhs to early-stage startups under the Startup India Seed Fund Scheme (SISFS). This is not a loan. This is not equity. This is a pure grant. Yet, most startup founders I meet are either unaware of this or believe it’s too complicated to apply for. Here’s what every serious founder needs to know: 🔹 You don’t need a market-ready product. You can apply even if you're at the idea or MVP stage. 🔹 You must be an Indian citizen with a startup registered in India, under 10 years old, and working on a tech-first or innovation-first model. 🔹 You must not have received prior government funding under any other central scheme. 🔹 To apply, your startup needs DPIIT recognition (which is free and easy to get at startupindia.gov.in) 🔹 Once recognised, go to https://lnkd.in/g66vuPaf, choose three incubators, upload your pitch deck and necessary documents, and submit your application. As an entrepreneur, I’ve often seen amazing ideas collapse due to a lack of funds and access. What I’ve also seen is that those who invest time in understanding government systems and startup policies go a lot further than those who wait for VCs to knock on their door. If you're working on an idea that solves a real problem, don’t let the lack of capital hold you back. 🔹 Pitch clearly. 🔹 Show why your idea is innovative. 🔹 Prove that your team can build it. 🔹 Keep your documents and vision sorted. India has never been more startup-friendly than it is today. But this window will only benefit those who are proactive and informed. If you’re building, I strongly recommend exploring this scheme. Every founder should know this. Every startup should at least try. A good pitch can open a ₹50 lakh door. Sometimes, that’s all you need to go from idea to execution. Watch this space for more such insights. And if you're someone working on a strong idea, now is the time to build. #startupindia #founders #entrepreneurship #startupfunding #SISFS #governmentgrants #businessstrategy

Every Stage of Fundraising Explained Every month I meet with founders who get confused about when to raise money and how much equity to give up. and if I'm being honest, most entrepreneurs jump into fundraising without understanding what investors expect at each stage. So you may be wondering what each stage actually looks like? Here they are: ➡️ PRE-SEED STAGE This is where it all starts...turning ideas into viable concepts. You're looking at $10K to $250K in funding, typically giving up 5% to 20% equity. The timeline is short, maybe 3 to 6 months with a tiny team of 1 to 3 people. Your funding usually comes from founders, friends and family, angel investors, or accelerators. At this stage, you're just proving the concept has legs. ➡️ SEED STAGE Now we're building the foundation and proving the business model works. Companies use seed funding to develop their minimum viable product, conduct market research, and establish initial market fit. You're looking at $250K to $2M over 8 to 18 months. What I love about this stage is you're expanding your team to 3 to 10 people and working with angel investors, seed VCs, and micro VCs. ➡️ SERIES A This is where things get serious...scaling the business model. Series A funding optimizes your business model and scales user acquisition. You need a clear monetization strategy and growing user base. We're talking $2M to $15M over 12 to 24 months. Investors want to see $100K+ monthly revenue, 20%+ monthly growth, and strong unit economics. That's pretty amazing when you think about the metrics required. ➡️ SERIES B Market expansion and growth become the focus here. Series B funding scales the business beyond the initial market. Companies expand geographically, develop new products, or enter adjacent markets. You're raising $10M to $50M with a team of 25 to 100 people. But my take? This stage is where tier 1 VCs, growth equity, and private equity really start paying attention. ➡️ SERIES C+ Well...now you're preparing for exit or global domination. Later stage funding rounds for companies preparing for IPO, acquisition, or international expansion. The focus shifts to market leadership and operational efficiency. We're talking $30M to $100M+ with teams over 100 people. I know I know...the equity given up drops to 5% to 15% because your valuation is much higher. ➡️ IPO / EXIT The final stage where companies either go public or get acquired. Companies at this level are unicorns with $1B+ valuations and $100M+ annual revenue. The entire process typically takes 5 to 10 years total to reach market leader status. Investment banks, public markets, and strategic acquirers are your funding sources at this point. === I had a lot of fun putting this breakdown together...and it really just shows how each funding stage has specific goals and expectations. What has your experience been with fundraising? Which stage are you currently in? Let me know in the comments below 👇

A bootstrapped SaaS just sold for $200M. No VC funding. No fancy marketing. No Silicon Valley office. Just pure product-led growth that turned into a $50M ARR business. Here's the untold story of Wingify's incredible journey: For the last 15 years, SaaS companies followed the same playbook: • Raise massive VC rounds • Burn cash for growth • Focus on expansion over profits But Wingify chose a different path. Here's what they did instead: It started in 2010 with a simple idea: Help businesses make better decisions with A/B testing. The twist? Instead of copying existing tools, they built the world's first visual editor for A/B testing. No code required. Just point and click. The results were immediate: • 1,000 beta users • 10 paid customers on day one • First enterprise deal within months • $1M revenue by 2011 All without a single dollar of outside funding. But they were just getting started: While competitors chased funding rounds, Wingify focused on innovation: • First to launch heatmaps (2010) • Pioneered visual editing (2011) • Integrated with Google Analytics (2012) • Built Bayesian statistics engine (2015) Each innovation drove organic growth. Think about what this means: When you're bootstrapped, you can't rely on fancy marketing. You can't outspend competitors. You can't hire hundreds of salespeople. You have to build something people actually want. The numbers tell the story: 2011: $1M ARR 2021: $25M ARR 2022: $30M ARR 2024: $50M ARR All while staying profitable. But there's an even bigger lesson here: You don't need: • Billions in funding • Hundreds of engineers • A Silicon Valley office Just: • A great product • Happy customers • Sustainable growth The playbook is about to change: Every SaaS founder studying Wingify will realize: • Product > Marketing • Profits > Growth • Sustainability > Scale The era of endless fundraising is ending. Here's what happens next: 1. More founders choose bootstrapping 2. Focus shifts to unit economics 3. Products win over marketing 4. Customers matter more than VCs But there's something even bigger happening: The acquisition shows that you can: • Build in India • Sell globally • Stay profitable • Exit big Without playing the VC game. The lesson? Sometimes having less means building more. Wingify proves you don't need: • Massive funding rounds • Fancy offices • Complex strategies Just a great product and the patience to grow sustainably.

A decade ago, most startup pitches ended with a calculation justifying the amount they sought to raise. In other words, the raise was an output of the financial model. But for the most sought after companies, the raise amount is disjointed from the capital needs of the business - instead it’s driven by the fundraising auction. Great fundraisers are the teams that build the most auction pressure. This auction dynamic, combined with venture capital’s explosive growth over the last decade, has transformed fundraising strategy. The goal is no longer to raise what you need, but to optimize for the lowest cost of capital. Cost of capital is the expense of a business to find dollars it needs to pursue its plan. Legal expense, dilution in the case of equity, interest in the case of debt. The reality is even though cost of capital is taught in economics classes, I’ve never heard it uttered in a board meeting. Companies with a lower cost of capital have a strategic advantage. Assume all companies in a space have the same cost-of-customer acquisition. The company with the lowest cost of capital should be able to acquire more of them. This is doubly true in the world of more efficient startups, where small teams can achieve legendary growth rates. Fundraises aren’t driven by needs; but by the supply/demand dynamics. In today’s market, masterful capital raising isn’t just a skill - it’s a decisive competitive advantage. This ignores the compounding nature of market leaders who win bigger customers, which reinforces social proof, and accelerates the capture of market share.

🚀 𝐈𝐧𝐝𝐢𝐚’𝐬 𝐓𝐨𝐩 𝐆𝐨𝐯𝐞𝐫𝐧𝐦𝐞𝐧𝐭 𝐒𝐜𝐡𝐞𝐦𝐞𝐬 𝐟𝐨𝐫 𝐒𝐭𝐚𝐫𝐭𝐮𝐩𝐬 🚀 Starting up is tough. But you are not alone. The Indian government has many schemes to help you grow fast and stay strong. 1. 𝐃𝐏𝐈𝐈𝐓 & Startup India • Seed Fund Scheme (SISFS) – Up to ₹20 L for proof of concept. Up to ₹50 L to scale. • Fund of Funds (@FFS) – ₹10,000 Cr corpus for VC funds. • Tax Holiday – 100% income-tax exemption for 3 years. • Angel Tax Exemption – No tax on fair‑value investments. • Fast‑track Exit – Close down in 90 days under IBC. 2. Department of Science, Technology and Innovation DST (Science & Tech) • Nidhi Prayas – ₹10 L for early prototypes. • nidhi eir dst goi – ₹20–30 K/month stipend for aspiring founders. • Seed Support – ₹25 L via incubators. • TBI & Accelerator – Soft loans or equity for growth. 3. MeitY Startup Hub (Electronics & IT) • TIDE 2.0 – Grants ₹4–7 L (ideation) and ₹7 L (PoC). • Samridhi Skilling Centre – ₹40 L matching fund plus mentor support. • GENESIS – Up to ₹1 Cr for deep‑tech in Tier II/III cities. 4. @𝐌𝐒𝐌𝐄 𝐌𝐢𝐧𝐢𝐬𝐭𝐫𝐲 • Incubation – ₹15 L per idea; ₹1 Cr to incubators. • Aspire NZ Seed Fund (Aspire) & PMEGP – Seed funds and subsidy‑linked loans up to ₹25 L. • CGTMSE-India – Collateral‑free loans up to ₹2 Cr (75–85% guarantee). 5. DBT – Biotechnology Industry Research Assistance Council (BIRAC) (Biotech) • BIG – ₹50 L grant for biotech PoC. • SBIRI & BIPP – ≥₹1 Cr grants/loans for SME R&D. • 74 Bio‑incubators – Labs, mentors, equipment. 6. NITI Aayog (AIM & WEP) • Atal Incubation Centre- BIMTECH Centres – Grants + infrastructure. • Atal New India Challenges – Funds for public‑sector solutions. • Women Entrepreneurship Platform – Networking + funding for women. 7. 𝐀𝐠𝐫𝐢 & 𝐑𝐮𝐫𝐚𝐥 • RKVY-RAFTAAR Agribusiness Incubator, IIT (BHU)‑RAFTAAR – ₹25 L for agri‑startups. • Agri‑Clinics – Training + finance. • Pmfme Scheme & SAMPADA – ₹10 L grants for food processing. 8. 𝐃𝐞𝐟𝐞𝐧𝐜𝐞 & 𝐓𝐞𝐜𝐡 • iDEX – Up to ₹1.5 Cr for defence innovations. • TDF – Up to ₹10 Cr for indigenisation. 9. 𝐓𝐨𝐮𝐫𝐢𝐬𝐦 & 𝐂𝐮𝐥𝐭𝐮𝐫𝐞 • Swadesh Darshan & PRASHAD – Boost homestays, guides, apps. • Tourism Hackathons – Pitch ideas on heritage tech. 𝐂𝐨𝐦𝐦𝐞𝐧𝐭 "𝐆𝐫𝐚𝐧𝐭𝐬 𝐏𝐃𝐅" 𝐢𝐟 𝐲𝐨𝐮 𝐰𝐚𝐧𝐭 𝐚 𝐏𝐃𝐅 𝐨𝐟 𝐭𝐡𝐞𝐬𝐞 𝐠𝐫𝐚𝐧𝐭𝐬 👉 𝐀𝐜𝐭𝐢𝐨𝐧 𝐒𝐭𝐞𝐩𝐬: 1. Get DPIIT recognition. 2. Pick schemes that fit your stage. 3. Connect with incubators. 4. Apply early. - 𝐋𝐢𝐬𝐭 𝐨𝐟 𝟏𝟕 𝐀𝐜𝐭𝐢𝐯𝐞 𝐆𝐫𝐚𝐧𝐭𝐬 - https://lnkd.in/dnAZwnqC Join my #WhatsApp Channel for live updates: https://lnkd.in/dzf-Gu2M Follow Utkarsh Mishra | Tag a @founder | #Grants2025 Tag a founder friend who must know this. Let’s build in India, for India! 🇮🇳 #StartupIndia #GovtSchemes #Entrepreneurs #Innovation #MakeInIndia

Most people who join startups as employees are joining with the dream of working in a company towards a shiny exit. The harsh truth is that a small percentage of startups actually have a significant exit, and even when companies do exit, returns are typically distributed first to investors. Employee outcomes depend on the company’s structure, timing, and individual equity terms. When an employee signs a work agreement with a startup he or she is usually being granted stock options. I find options are one of the most misunderstood concepts in venture that is creating a lot of frustration among talent but also lack of trust with founders and CEOs. In a company I worked with, one of the early employees was positive that when he joined the company he was granted equity, real shares in the company vested over 4 years. He worked in the company for 10 years reaching a VP level. He worked day and night, weekends, and was one of those legendary people who was there from day one. But when he decided to leave, he discovered that what he thought was equity, was actually Stock Options. He was so furious that day, having to pay over $120k to buy the rights for his vested stock options. He wasn’t expecting to pay such a large sum, also having a new baby and planning to buy a new apartment. He simply could not afford it, and decided to let it go - 10 years of equity were lost. That was in 2008, and after a while the company exited. He could have paid his mortgage, and be well off. I personally was offered several times stock options as an advisor, and today I’m quite open and say that I am only joining for equity and not the option to buy equity. I believe the mechanisms in which we incentivize employees to join startup teams have to change and we must address the fact that more than 55% of startup employees* miss the opportunity to really exercise their stocks and become owners of the startups they worked for. There are two things I recommend founders to do to build that trust with new employees: 1. Be clear with your new joiners that what they are getting in their package is stock options and explain the difference from realised equity.  2. Provide them with a solution like Equitybee that allows employees to cover the cost of exercising their options, including taxes, without risking their personal savings. When they decide to leave, or make a career move, they can afford to become owners of the company and live the dream you may have sold them when they joined. * according to Cara State of Startup Compensation H1 2025 | Equitybee is FINRA/SIPC member.