If you're looking to set up an employee option plan from scratch, make sure you check out our Resource Hub to learn more about stock options -
Cake has made it as easy as ever to set up a new option plan for your company. You can have a plan with contracts in just a couple of clicks! 🪄
Select Incentive Plans then Add Equity Plan.
Select Options/ Stock Options from the main menu.
Click Create a pool in the centre of the page.
You can utilise our quick setup by just entering the % of equity you wish your ESOP to represent or click on the Advanced Settings to be more specific. Number of Options: Enter the total number of options for this option pool. Option Price: Enter the price per option. Note: most plans don't require the option holder to pay for the options. Exercise Price: Enter the exercise price per option. This is the price the option holder has to pay to convert the options into shares (often referred to as the Strike Price).
Now that you have created your option plan, click View pool on the Option Pool.
Click Add Offer to add the offers for each of your option holders.
Enter the data in the fields; Select or add option holder: You can either add a new option holder or select an existing investor, just start typing and select from the dropdown.
Enter the total number of shares you wish to allocate to this employee into step 2, either as a % or enter the number of options you want to allocate.
Add in the Start Date: Enter the date that the options should start vesting.
Now it's time to create the vesting schedule.
There are two types of vesting available; time-based vesting and milestone-based vesting. In time-based vesting you can create a cliff and/or periodic vesting. We've saved the Industry Standard as a default vesting schedule to make it even quicker to get set up.
To customise your own, click Custom and add in your cliff / time-based / milestone vesting. You can save your own vesting schedules as templates to use next time!
To add milestone-based vesting click Add Milestone and complete the fields; Number of Options: Enter how many options you want to allocate to this milestone. Description: Describe the criteria that has to be met in order to earn these options.
In the final step, add the exercise price for the offer (strike price).
Under the Advanced Settings, choose whether you would like your employee to be able to nominate an affiliate to hold their options.
Once you are happy with everything, either Save draft or Send offer.
If you have selected to save a draft, you can send out the final offer to the employee by clicking Complete offer.
Once the employee has signed the Offer Letter, the options will be automatically Granted on the date they executed the Offer Letter.
Repeat steps 5 to 12 for every option holder that you want to add to your option pool.
The system will automatically vest the time-based vesting schedules when the vesting dates arrive and send an update to your option holders. However, you have to trigger the vesting mile-stone based vesting events yourself from the Option Holders list.