Tomorrow, I'm passing my Cliff. 3 reasons why this day is important to me and why all startup employees & founders should also celebrate it.

April 7th 2020, exactly 364 days ago, I officially (contractually) started my journey with Capdesk, and it’s the same day the countdown timer linked to my cliff on my option grant started.

I’m shocked from conversations with other startup employees who have been granted options but have little to no understanding of it, especially the specific details tied to it to motivate them. 

People, if that’s not a broken system, then what is?

If you have no idea what I’m talking about when I refer to the “Cliff”, you are not alone, so go read our thorough introduction to employee equity guide.

In short, a cliff is a pre-agreed date (standard is 12 months from granting) linked to the first tranch (often 25%) of options that a company grants to you vesting. The vesting of these options doesn’t mean that I become a shareholder or equity holder but instead gives me the legal right subject to following other requirements (be careful with bad and good leaver clauses) to buy those options at a predetermined “strike” price if I choose to leave the company.

Look, equity is a complicated beast, but I’m sharing this as #employeefirst means you all reading this need to upskill in this area, have conversations about it with your peers and hold your startups, founders and VCs accountable to providing greater clarity to this minefield of a topic.

Passing your cliff is a big deal and something we should all celebrate, and I’m incredibly proud to hear that our customer Billie even has a company ceremony for this (fantastic); read about it here. 

However, this day will become a bigger deal over the next few years as the ecosystem is ready to evolve to empower you as employees to do something with your options. It’s not just thanks to some of our work, but also other players in the space, which is DAMN exciting. 

For me, tomorrow means several things. 

Here are three reasons why I will be celebrating and why you should be celebrating this day when it comes:

#1 Sticking around means you’re valued:

When founders believe enough in my value, to willingly give up a piece of their business because of the added value I’ve generated up to this point is a big deal and a gesture anyone in a startup should relish.

At any point in the last 12 months, I could have been let go and lost it all, and in this time, I was expected to, let’s face it, “ethically increase the share value of the business”. 

This day means that having you in the business translates to the company being more valuable and justifying them paying you in salary and equity (options). Consider this the sweat & the blood minus the tears. 

#2 Actual ownership fuels motivation:

I’m an ENFP-A (The Campaigner), and I'm strong at self-motivating, but I like many others, go through the ups and downs, and as Harvey Spectre would say, when you’re back is against the wall; break through the damn wall.

Ownership motivates me in a sustained way because it ingrains total accountability; having the right to own part of a business that I’m fighting for every day to become a unicorn means I’m bought in till the end; no one messes with my companies.

If you can find that sense of pride and defence for something you believe in, it goes far beyond any paycheck. People that choose to do the startup things are crazy in general, you sacrifice many things like job security, pension and sometimes unique perks, but you do it for a higher purpose knowing that you’re changing maybe not the world but that you could one day. 

#3 Liquidity is right around the corner:

The most exciting part about passing my cliff is that it’s happening in Capdesk. We’re already changing the industry and ecosystem; we don’t just list equity and help companies manage it (the unsexy, sexy that we do), but we already provide employees and early investors with the ability to get liquidity via secondaries (this is just crazy!).

As someone who already holds options in other companies, I currently have no clue when they might be worth anything, but in Capdesk, I know I will be able to get liquidity at a time in my life when I will need it most.

As the saying goes, "your life plans don’t always align with your companies IPOs plans."

For all of you, this should be the most exciting thing because thanks to what we’re doing at Capdesk and other movers and shakers in the space, you are finally going to be able to take out the value you’ve built in a company at a time that fits your life.

If your company is not using Capdesk, you need to hound your founders to at the very least explore our secondaries feature because they don’t need to have a Capdesk subscription to use it, and that will empower you.

As always, I am signing off #employeefirst. Keep up the hustle.