Therefore, we decided to conduct a comprehensive survey to examine just how much Israeli startup employees know about their stock options. To reach as many people as we can, we joined forces with the Facebook community HiTech Problems in a one-of-a-kind collaboration.

Our goal was to help startup employees take ownership of their hard-earned equity by allowing them to learn more about the current stock options trends in the Israeli startup community. 

We hope that this report, together with the guides and educational tools you can find on our blog, will take you one step closer to understanding your stock options and making the best decision possible when it comes to exercising them.

TL‭; ‬DR‭:

The Bottom Line 

Survey Highlights

How many options do startup employees receive?

The exercise cost of close to 75% of the stock option packages in Israel is $50K or less

70% of employees who have worked for a startup for over two years received more than one stock option package

The average stock option package size in Israel is $70K, and the median package size is $31.5K

Intro: Employee Stock Options Survey 2021

At EquityBee, we get to meet the people behind the most successful startups in the United States and Israel. Every day, we’re surprised to discover how little startup employees know about their stock options. 

We believe that knowledge is power, and when it comes to your equity compensation - the more you know, the more you can potentially earn.

Stock options and negotiations

Nearly 50% of those who did not negotiate their stock options feel that they do not know enough about stock options in general, and almost 40% did not know that it was possible to negotiate them at all.

95% of startup employees negotiate their salary. 

Only 43% negotiate the size of their stock option package.

Significant knowledge gap: 66% of startup employees do not know what percentage of the company their stock options represent, and 47% do not know the value of their stock options.

Of the employees who would not exercise their stock options if they had to make an immediate decision, 48% would not exercise them because they do not have enough information to assess the value of their stock options, and 26% do not know enough about stock options in general.

Knowledge of stock options

The impact of stock options on employee motivation

70% of startup employees feel that stock options increase their sense of belonging to the company

54% believe that stock options can impact their financial future

47% work harder to contribute to the company’s success as a result of receiving stock options

Main conclusions

from the survey

The level of understanding increases with seniority and years of experience - younger workers are less likely to negotiate their stock options, be knowledgeable about their stock options, and believe that their options can impact their financial future. Some junior employees don’t even know that they can negotiate their stock options.

Stock options positively impact employee motivation. Nonetheless, it appears that companies are not transparent with their employees when it comes to stock options.

Gaining more knowledge about stock options in general will help startup employees at all levels make sense of their own stock options and their potential impact on their financial future.

Employee Stock Options Survey 2021 

EquityBee and the "HiTech Problems" Community

Background 

Information 

In this report, you’ll find the results of EquityBee & HiTech Problems’ Employee Stock Options Survey. 

1037 startup employees participated in the survey during the period of October 3rd-October 18th, 2021. 

We include the results obtained from employees who received stock options from their company. 

The survey was published in the HiTech Problems Facebook group, as well as on EquityBee’s social media platforms.

Who participated in the survey?

Total Capital Raised by the Startups

Number of Employees at the Startups

12% of participants are juniors

25% hold mid-level positions

26% are seniors

17%  are managers (e.g., team leaders)

13% are senior managers

7% are VPs

Participants’ Seniority Levels

20% Cybersecurity

18% work for fintech startups

18% work for media and internet startups

10% work for enterprise software startups

13% work for Digital Health and Medical Devices

7% work for Automotive

Industries of the Startups

60% Research & development

11% Product management

7% Sales

6%  Operations & project management

5% QA & automation

Participants’ Job Titles

Main Results:

Employee Stock Options Survey 2021

The average option exercise cost in the United States is three times higher than in Israel

Average stock option package size in Israel: $70K

Average stock option package size in the United States: $218K

USA

ISRAEL

Median stock option package size in Israel: $31.5K

Median stock option package size in the United States: $80K

USA

ISRAEL

*The data are based on the analysis of about 3,000 stock option packages of U.S. and Israeli startup employees. The U.S. exercise costs do not include tax.

How many stock options do Israeli startup employees receive?

Startup employees often ask us what's the norm when it comes to the average size of an employee stock option package.

In contrast to salaries, there are no tables or figures you can look for online to learn about the typical sizes of employee stock option packages (per position, industry, or seniority level).

To promote transparency and shed light on this issue, we analyzed the results of this survey, as well as data from the EquityBee platform, to determine the average option exercise cost - a figure that can be compared across employees and companies. In addition, we examined the likelihood of receiving more than one stock option package throughout the employment period.

Stock Option Package Sizes of Israeli Startup Employees

(Based on Total Exercise Cost)

The exercise cost of about 75% of Israeli employees’ stock options is $50K or less.

The highest-paid startup employees (i.e., monthly salaries of ₪50K+) have to pay the highest exercise cost to purchase their shares.

Did you know?

70%

of startup employees who work for a company for over two years - receive more than one stock option package.

Open to 

negotiation?

Stock option packages are a key element of your compensation as a startup employee. 

Thus, we were keen to find out how many startup employees negotiate the main factor that can impact their financial future, and how this compares to the negotiation of other compensation elements.

of startup employees negotiate their salaries

95%

Senior employees are more likely to negotiate their stock option packages. Of the junior employees, only 16% negotiate their stock options, compared to 65% of C-level employees and VPs.

Did you know?

of startup employees negotiate their stock option packages - even less than the percentage of employees who negotiate their time off

43%

Senior employees view stock options as a significant part of their compensation. They also understand their impact on the company’s potential future success, which directly impacts the value of their stock options.

Why does this happen?

Why don’t startup employees negotiate their stock options?

feel that they do not know enough about stock options in order to negotiate them

Almost 50%

did not know that it was possible to negotiate their stock option package

Almost 40%

I don't know enough about stock options

I didn't know I could negotiate

I don't like negotiating

I was worried I'd lose the job offer

I was worried I'd leave a bad impression

What do startup employees who did not negotiate their options say?

"I was not told what the share percentage was, and I do not know how many stock options others received."

"This was my first startup job, and I did not understand the importance."

“To me, the number of options is arbitrary. Whatever number they propose - I wouldn’t know if it’s considered high or low."

“It's hard to negotiate something with an unknown value, so how can you negotiate the number you received? Therefore, I only negotiated the elements that could be assessed."

Knowledge gaps regarding stock options and the process of granting them, lead employees to avoid negotiating them, resulting in lower potential profits following an exit event. Lack of transparency and knowledge harms startup employees.

Bottom line

What do startup employees know about their stock option packages?

At EquityBee, we believe that transparency helps employees enjoy the full potential of their stock option packages. Therefore, we wanted to find out how familiar startup employees are with their stock options and map out their knowledge gaps.

The results were alarming.

The younger the startup and the less money it has raised, the higher the percentage of employees who know what percentage of the company their stock options represent.

Did you know?

46% do not know how much their stock option package will be worth in various exit scenarios (e.g., the company goes public or gets acquired).

47% do not know the value of their stock option package.

66% do not know what percentage of the company their stock options represent.

On the downside:

17% strongly agree with the statement that the company they work for is transparent in regard to the value of stock option packages.

66% know how much time they will have to exercise their stock options once they leave their company.

On the upside:

82% know the exercise price of their stock options.

93% of startup employees know how many stock options they were granted.

How do stock options impact employee motivation?

Stock options can significantly impact the financial futures of employees who receive them. 

Therefore, we were interested in examining how they affect employee motivation and if they encourage employees to strive to contribute to the company’s success - which will be reflected in their profit.

Employees don’t rush to give up on their stock options in exchange for a higher salary 

Less than 10% of startup employees strongly agree with the statement that they would prefer to receive a higher salary - even at the expense of a smaller stock option package

The higher the levels of seniority and experience, the greater the impact of stock option packages on employee motivation, the more employees believe that stock options can impact their financial future, and the more employees are willing to receive a lower salary in exchange for a larger stock option package.

70% of startup employees feel that stock options increase their sense of belonging to the company

54% believe that stock options can impact their financial future

47% work harder to contribute to the company’s success as a result of receiving stock options

To exercise or not to exercise?

Of the startup employees who wouldn’t exercise all of their stock options:

49% have doubts regarding the future of the company

48% do not have enough information on the company to assess the value of their stock options

26% do not know enough about stock options in general

22% do not have enough money to exercise all of their options

15% are reluctant to take the risk of exercising their options

Most startup employees believe in the value of their stock options

71% would exercise all of their stock options if they had to make a decision due to leaving their startup

Bottom line

Lack of transparency and knowledge regarding stock options prevent some startup employees from exercising their options - and participating in their startup’s potential success after leaving the company.

About Us

EquityBee provides employees with the funding they need to exercise their stock options once they leave a startup. While exercising your stock options can positively impact your financial future, it also involves the risk of losing the money you invest in exercising them, which can add up to hundreds of thousands of dollars or even more. EquityBee's Investor Community (which now includes over 14K accredited investors) provides startup employees with the capital they need to become shareholders, minimizing the downside risk associated with exercising their options in exchange for a percentage of the potential future gains.

EquityBee was founded in 2018 by Oren Barzilai, the company's CEO, Oded Golan (CPO), and Modi Radashkovich (COO). EquityBee currently employs about 80 people in Israel and the United States. The company has raised $83 million to date from leading venture capital firms, including Greenfield Partners, Group 11, and Battery Ventures.

For any inquiries, please feel free to contact us at [email protected] or visit our website

HiTech Problems is the largest tech community in Israel, with over 115,000 members who create and consume content on a daily basis, which comprises an integral part of the tech discourse in Israel. The community that began as a space for tech employees to joke about their “struggles” (e.g., being gifted a new iPhone with just 16GB of storage) has since evolved into a platform for employees to discuss and share anything on their minds.

Visit our community page on Facebook

Copyright © 2021 EquityBee Technologies Ltd. All rights reserved.

All information provided herein is for informational purposes only and should not be relied upon to make an investment decision and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies.

EquityBee executes SOFAs (Simple Options Financing Agreements), which allow investor/s a certain portion of option-holder's future proceeds upon a liquidation event (with no guarantee of such an event), and it could limit option-holder's profits. Execution of SOFAs is subject to the terms of the options agreement. Completion of the funding process is subject to additional terms and is not guaranteed. Employees are advised to consult with their own professional advisers prior to executing a SOFA.