During the meeting, I shared my thoughts as I'd outlined them in my previous blog post. Thanks so much to everyone who responded in the comments, your thoughts and ideas were really useful. The people I met with had good questions and seemed to have a good take on the issues and impact for startups of the current legislation. They were meeting with quite a few people in the space over a couple of days. They indicated that one of the challenges they face is how to make things simpler for startups, while ensuring larger companies like investment banks can't use the legislation as a way to reduce their tax obligations. (Apparently the law around options changed a few years back to prevent Macquarie Bank using the legislation to pay less tax. Startups got caught up in these changes).
We're in the process of putting together an employee share options plan for our team at Shoes of Prey and as we've progressed with this over the last few weeks I've come to the realisation that while the law around this is a long way from perfect, it's actually not that expensive for a startup to structure a good plan within the law as it stands at the moment. We're finalising our plan now, the total cost for accounting and legal fees will be $5,000, well within the budget of most startups.
I'll post full details of how we're structuring our plan in a few weeks time when it's up and running.
In the meantime, I'd love to hear from others who have set up ESOPs. Did you have a similar experience to us where, while not as simple as it could be, in practice the cost of setting this up was actually quite low? Do we actually need to be lobbying to change this legislation or are we better off focusing our energies on other, extremely important areas like education?