How long does it take to set up a virtual share plan?

Setting up a virtual share plan does not have to be a long process. With a standard plan and a few clear choices, you can get started quickly.

Most of the time usually does not go into the technical setup, but into deciding the terms and getting internal approval. With the right preparation, you can speed that up considerably.

In short: the software is rarely what slows you down. Decisions, exceptions and participant data are. Start with a standard plan, make the key decisions first, give one person ownership and begin with a small group. You can expand the plan later.

Time

Where the time really goes

In our conversations with companies, the technical setup is rarely the biggest delay. The time goes into three things:

• Internal decisions. Who participates, how much everyone gets, which vesting applies and when a payout follows.
• Exceptions. Different terms for one person or group, such as a separate vesting rule, need extra alignment.
• The right data. Names, email addresses, grants and any existing agreements have to be correct.

None of this is a reason to wait. It is a reason to prepare.

Phases

Setting up versus launching

It helps to separate two phases.

Setting up the plan

You record the basic choices and configure them. With a standard plan as your starting point, this part is largely in your own hands.

Launching the plan

The people responsible approve the terms, participants are invited and they accept their grants. This phase often depends on the company itself: how quickly directors, shareholders or advisers respond, and how quickly participants sign.

That is why we do not promise a fixed lead time. How long it takes depends mostly on how quickly decisions are made on your side.

Steps

The four steps

On Sharesquare, setting up a plan comes down to four steps:

1. 11. Set the basicsWho participates, how much do participants get and which terms apply?
2. 22. Configure the planUse a standard plan as your starting point and only change what you need. The documents are drafted from your choices.
3. 33. Review and approveLet the people responsible check the terms and the grants.
4. 44. Invite participantsSend the grants and give employees access to their personal dashboard.

Want to see what each step looks like? Take a look at the platform.

Practice

Six ways to keep it short

1. Start with a standard plan

Companies that want different terms, for example different vesting rules per person, need extra alignment. A standard plan gives you a solid basis that you only adjust where it really matters. A concrete example also helps: for one company we prepared an example plan on the platform in advance, so it could be discussed and configured further in the next session. A draft on the table leads to decisions faster than a blank page.

2. Make the key decisions first

Who participates, how much does everyone get, which vesting applies and when is there a payout? Once these four are clear, the rest follows much faster. Our article on how many shares to grant employees helps with the second question.

Keep the valuation simple as well. In one case, a complex valuation formula still had to be agreed. The company then chose to keep the valuation simple, which made the next steps easier.

3. Appoint one internal owner

Sometimes next steps wait for decisions from several directors or advisers. One person who keeps track of the process and collects the answers prevents the plan from stalling.

4. Collect participant data in advance

Names, email addresses, grants and any existing agreements need to be correct. Having that list ready before you start saves a lot of back and forth.

5. Start with a small group

You do not have to include the whole organisation at once. Begin with your first employees or a few key people. You do not need a fully worked-out participation policy for the next five years to get started.

The same applies when you bring in existing agreements. When a company moved its paper certificates into the platform, our team advised completing the onboarding in phases, so the overview stayed clear.

6. Only communicate once the plan is final

Tell employees about their grant once the terms are settled. That prevents confusion and having to send agreements again. Settle exceptions before the first rollout too: when one company wanted accelerated vesting for a new employee later on, it raised the question of whether to amend the existing plan or create a new one.

Start

Start simple, expand later

You do not have to work everything out perfectly from day one. Start with a well-thought-out basic plan and expand it later. New participants and extra grants can follow as your company grows.

And if the first choices feel difficult: that is normal. It is exactly the moment many companies ask our team to think along with them.

This article is general information, not legal, tax or financial advice. The examples are illustrative. Check the exact rules for your situation with your own adviser.

Knowledge base

Frequently asked questions