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Podcast: Investor Connect Podcast
Episode: Startup Funding Espresso – Using Rule 701 To Issue Equity to Employees
Description: Using Rule 701 To Issue Equity to Employees Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. In a startup, it’s helpful to compensate employees with company stock. Most companies use stock options. Rule 701 gives the startup the ability to issue equity to its employees. This works even if they are not accredited investors. The limit is $10M or 15% of the outstanding shares in a 12-month period. Once you set the 12-month period, it must remain fixed. Rule 701 provides an alternative to the traditional stock option plan. It’s more...