A Striking Explanation of VC Mechanics, Part 4: ESOP

There are many articles out there explaining the mechanics of investment rounds. However, there are a range of founders who are still not confident enough about such VC and investment mechanics.

That’s why Iskender Dirik (MD at Microsoft Startup Growth Partners and Venture Partner at EQT Ventures), Christopher Mohrmann (Investment Associate at Bauer Venture Partners) and Peter Möllmann (Partner at Schnittker Möllmann Partners) decided to create a very striking, visual explanation of the most important mechanics via infographics.

The last infographic out of the series “A Striking Explanation of VC Mechanics” is about employee shares (resp. “ESOP”), which is the most common way to gain long term commitment of key employees within the startup scene. By showing simple numerical examples, it is explained how employees can benefit of ESOP-options during an exit and how the profit can be calculated out of these options.

Authors: Iskender Dirik (MD at Microsoft Startup Growth Partners and Venture Partner bei EQT Ventures), Christopher Mohrmann (Investment Associate at Bauer Venture Partners), Peter Möllmann (Partner at Schnittker Möllmann Partners).

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