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As the recent Ventureburn Startup Survey revealed, South African startups have a real problem when it comes to retaining employees. To a large degree, that’s because the salaries at startups simply aren’t large enough. And while the norm in other markets is to give out equity, just eight percent of South African startups do so.
In a bid to change that, industry veterans Vinny Lingham and Llew Claasen have launched the Newtown Employee Share Trust to manage Employee Share Ownership Programmes (ESOPs) for South African startups.
ESOPs enable startup companies to allocate equity to early personnel hires without the complications and costs associated with figuring out things like:
- how employees earn out shares that they haven’t paid for upfront
- when and how employees are allowed to sell the shares they earn
- how employees participate as shareholders, without getting access to all the sensitive information available to directors and external investors
- what happens to the shares if an employee leaves the company, passes away or is fired
Newtown Partners’ ESOP Management programme pricing starts at R171 per month for startups with up to five ESOP employees.
The programme has been in beta since July and is currently accepting applications from startups who want to get started with their ESOP programme.