Equity Management • ESOP

Build and manage your ESOP on Clara 

Create your ESOP and option grant agreements and use our DocuSign integration to collect signatures. Oh yeah, enjoy automatic cap table updates, too, when you manage your ESOP on Clara.

Granting and managing options is a breeze with Clara.

ESOP in minutes 

Complete the process digitally in a few clicks, including Board approvals. 

Automated vesting schedules 

Every time you issue a grant, the vesting schedule will automatically appear on your cap table with all the math done for you.

Built-in  exercise notices

You’ll be reminded of upcoming vesting dates and Clara will pre-populate exercise notices – ready to be signed by your team members.

Easy onboarding

Make ESOP allocation a seamless part of your onboarding process. Generate grants for new team members in a few clicks with everything signed through the platform.

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You can’t beat Clara’s ESOP functionality!

You can’t beat Clara’s ESOP functionality. It allows us to grant options to our team in a few clicks while automatically updating our cap table. Truly next level.

– Michael Hunter, Co-Founder and CEO at Holo

Trusted by leading companies, investors and lawyers around the world
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An introduction to ESOPs

Clara’s ESOP documents comprise of an option plan, board resolution approving the plan, grant agreements and an FAQ document.

Option plans & grant agreements

The plan sets aside a pool of share options that you can allocate to employees, directors, advisors and consultants. Once your plan is in place, you can issue grant agreements to allocate options from your plan’s pool to team members.  

Attract, incentivize & retain 

An ESOP allows you to attract talent, incentivize your team to contribute to your company’s success and retain them through time-based vesting. An ESOP can also be used for consultants and advisors, not just employees.   

Attract and retain talent with Clara’s ESOP management tools.

How to put in place your ESOP

01

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Login

Login into your account (or sign-up, if you don’t have one).

02

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Generate your option plan

Click the blue (+) button, choose the relevant jurisdiction from the dropdown and select Share Incentive Plan or Equity Incentive Plan for Delaware.

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Complete the form

Complete each field in the form and select your various options, including the pool of shares you want to set aside for your ESOP.

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Adopt the option incentive plan 

Once you generate the plan, you can save it in draft, edit it and when final, send it for signature through our built-in DocuSign integration. It will be signed by way of a board resolution adopting the plan (the actual plan itself is not signed). Clara will take care of all that for you.

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Repeat for grant agreements 

Now that your plan is in place and ESOP pool set aside, you can start issuing options to team members. Just go back to the Generate Documents tab, select Grant Agreement, complete the form and sign it when you’re ready.

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Arrange for exercise notices 

Clara will automatically remind you when an upcoming vesting date is near and pre-populate an exercise notice ready for your team member to sign and send back to you, right on the platform.

Resources & Insights

Stories, updates and resources

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Starting a company is hard enough, but managing legal processes shouldn’t be. With Clara’s dedicated accelerator onboarding solution, companies can get the support and infrastructure they need to efficiently and professionally complete their legal due diligence and finalize an investment.

amal-dokhan Amal Dokhan General Partner MENA, 500 Global
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Clara is a one-stop shop for everything equity related. All our data is safe and securely stored and accurately recorded. And our investors love having direct access. It has saved us countless hours and kept our cap table mistake free.

jessica-anuna Jessica Anuna CEO & Founder, Klasha
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We spend a lot of time educating founders on basic legal concepts: what they need to do for us to invest in them. Clara automates these functions. As Clara’s first institutional investor, we knew intuitively from inception, this company will be a game changer.

vijay-tirathrai Vijay Tirathrai Managing Director, Techstars
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Founders often struggle with managing their legal function due to lack of expertise and resources. And we’ve seen poor legal structures create hurdles to our investing in otherwise healthy startups. Investors like ourselves love that Clara gives founders the tools they need to establish, grow and scale their startups from day one on a best-practice basis.

shane-shin Shane Shin Founding Partner, Shorooq
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US cap table solutions aren’t tailored to the differentiated needs of international startups. Clara is the only cap table provider we found that had emerging market startups in mind. Add to that all the other things you can do on the Clara platform, from building your ESOP to data room management, and switching was a no brainer.

omar-rifai Omar Rifai Co-founder, GrubTech
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From company formation to maintaining the cap-table, by using Clara founders can digitally form their companies in a range of jurisdictions, create and manage their cap-tables and generate legal documents. Clara is quickly becoming an integral part of the startup software stack.

daniel-dos-reis Daniel Dos Reis Investment Director, Wamda Capital

Clara is a must-have for founders. Not only does it provide all the legal tools you need in a single platform, using Clara also signals to investors that you are a serious startup.

Mazen AlDarrab Founder & CGO, Zid
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IP Assignments, what? I didn’t even know they existed before Clara. For startups, setting up governance, corporate structures, data rooms and fundraising are all hard to get right. Clara’s legalOS is premium. It pays for itself.

zohare-haider Zohare Haider Co-Founder & CEO, Jalebi

Binance uses Clara to incorporate and manage ADGM entities. The team at Clara are extremely efficient and go the extra mile to ensure we always have a smooth experience and meet our deadlines. Top-notch service!

Vishal Sacheendran Head of Strategy and Operations, Binance

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Trusted by more than 10,000 equity owners.

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Our customers operate from more than 45 different countries.

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Savings on fees

Our customers on average save more than 80% on their annual legal and admin fees.

FAQs

Frequently asked questions

We have put together some commonly asked questions 

What’s the purpose of an ESOP?  

An ESOP helps you attract, incentivize and retain team members, and empower them as part-owners aligned with the interests of your company. ESOPs tend to be especially important for early-stage companies given the inherent risks and lower salaries associated with these  
types of roles. 

When should I put an ESOP in place?  

Every situation is different. It generally makes sense to have one as soon as you feel you need to start attracting talent and hiring and growing your team.

Do recipients of options under an ESOP have to pay money to exercise them? 

This depends on how you choose to structure your ESOP and there are important tax implications both for your company and team members, so please always obtain professional tax advice (and your team members should too). However, it is common for some payment to be made, either based on the fair market value of your company at the time the grant of options was made – more typical for jurisdictions with tax – or at the very least the par value of the shares (a small nominal amount that is typically between US$0.001 to US$0.00001 depending on the jurisdiction) as this is usually a legal requirement – more typical for low or no tax jurisdictions.

What rights does a holder of options under my ESOP have? 

While they hold only the options, their only rights will be the right to exercise the options as they vest and receive the corresponding shares. Once they become shareholders, the rights they have will depend on how you choose to structure your ESOP. It’s not uncommon to give very few little rights, including no voting rights, as the main purpose of the ESOP is to provide economic incentives and not governance rights. 

What happens to the ESOP options if the company is sold?

While options remain outstanding subject to vesting, you have to look at your “acceleration” provisions. The most typical ones are “single-trigger acceleration” which immediately accelerates all vesting so that your team members take all their shares immediately prior to the sale and can sell them at the same time as the sale or “double-trigger acceleration” which means that a team member’s vesting schedule continues as is under the new buyer and would only accelerate if their engagement is terminated as part of the sale or within a period of time after (typically between 6 to 12 months). 

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