A summary of why you should seek outside guidance and trust in your support network for the management of the stock plan.
Good day to you Controllers and VPs of Finance…
A hearty hello to my fellow General Counsels and Paralegals…
Hello HR Analysts and People Managers…
Are you…
- Involved in an IPO? First time taking a stock plan from the private to the public market?
- Rolling out a new equity program? First time rolling out an ESPP (Employee Stock Purchase Plan) maybe?
- Dealing with turnover? First time your stock plan admin or manager put in their two weeks?
Accept the possibility (and you will know if you fit this criteria) that you probably don’t fully understand what you are doing.
Accept another possibility (and you won’t know if you fit this criteria) that you aren’t fully aware of what you are doing but probably think you know what you are doing.
Check out High Level: Preparing Your Stock Plan For An IPO
Don’t get upset, we all can’t know everything…
*Some Fluff Stuff* Sales Guys: There’s the common association with the stereotypes of the greasy used car salesmen or the telemarketer. The pushy, pressuring, deceiving person who will do anything to close the deal and collect that fat commission check. The truth couldn’t be further from the majority of reality.
I’ll pull some numbers out of my…back pocket and say that a small percentage of salesmen are responsible for these stereotypes. The reality is that most sales people have a cure for cancer and they know it. It goes much deeper than sales and falls under a standard human need. Salesmen want to to work for a good company they trust and want to sell a product or service they believe in. Salesmen want to feel they are progressing and building a business not flipping one lost contract for the next when another “sucker” steps up to the plate…
*End of Fluff Stuff* Quality salesmen are relationship managers and guide their prospects and clients through the decision-making process. For every one call you make to us…we are receiving twenty calls just like yours. We know some of these processes better than you do and we see the same cycles from companies and the people in charge of these functions. In regards to an IPO, a typical scenario might play out like this…
January
- Company files S-1.
- Appointment of Joe from accounting to manage the stock plan.
- Company goes public, champagne flows
- Ignore sales calls. Salesmen recommends outsourcing but Joe can handle this. “No thanks, we have internal resources.”
- Six months passes. The lock up expires. The workload increases. Joe is overwhelmed and screws some things up (because he isn’t an expert).
- Job Posting. “We need expertise. Talk to recruiting and put up a job posting!”
- Ignore sales calls. Recruiting will find someone “No thanks, we have recruiters. The CFO likes to keep this function “close to the heart” so we don’t want outsourcing.”
- Six months passes. Maybe your compensation isn’t high enough to attract the proper talent? Maybe your location is Nowhere, USA? Maybe you only have 250 employee’s and that’s only 10-15 hours a week to manage, but yet you want to hire someone full time for 150K total cost to employ another body…
- Ignore sales calls. “Thanks for checking in. We will find someone”
- Six more months passes. You have three subpar resumes sitting on your desk and three rejected offers from the quality people you wanted to hire. Joe has grey hair. “Maybe we should outsource the function…call that one guy”
- Company Outsources. Problem Solved.
You see a salesmen was calling you over the past 18 months and could have explained the cycle to you and made his recommendation, but you were “No thanks” “All set” “We’ll reach out if we need anything”
We see these cycles constantly. We deal with call backs from people who juggle the same issue for weeks to months to years and finally they find a solution and can settle on the problem.
In Conclusion: Whether you are dealing with turnover, rolling out a new equity plan, dealing with internal transitions or complex M&A activity, or transitioning from the private to public market…we have watched this movie many times. Often enough, a company ends up doing exactly what we recommended from the beginning. If only you had sacrificed 18 minutes of you time to truly take in what we are saying then you would have spared 18 months of headaches.
Seek guidance from outside resources and people who live and breath this space. Trust in them…and in yourself to filter through the salesmen who view you as a commission check vs the ones who actually want to help. This can be applied to all industries, all problems, in your personal and professional life; seek guidance and get outside opinions as you never know what you will discover.
Our Take:
Equity Point is here to assist in not only providing further high level guidance (like what is outlined in this article) but open the doors to the different kind of specialized vendors in this space. We have partnerships with multiple software providers, outsourced providers, staffing and consulting agencies, and a network of independents to leverage and ensure you find the right vendor at the most competitive price. Talk to us and we can recommend specific options, gather quotes, provide consultants or candidates for placement/temp-perm.