- EquityBee, a startup employee stock options funding solution, announced it has raised $6.6 million in funding led by Group11
EquityBee — a startup employee stock options funding solution founded by CEO Oren Barzilai, CPO Oded Golan, and COO Mody Radashkovich — announced it has raised $6.6 million in funding led by Group11 with participation from Battery Ventures and LocalGlobe. And over the past year, EquityBee enabled hundreds of Israeli startup employees to exercise their stock options and now it will utilize its experience and vast investor Community to support the U.S. market.
It is estimated that startup employees and company builders forgo 50% of $60 billion in unexercised stock options every year. When employees leave their startup, they have a limited amount of time to exercise their stock options before they expire.
And the cost to exercise can reach hundreds of thousands and sometimes millions of dollars as the employee is required to purchase their stock as well as potentially pay substantial taxes on the theoretical profit at the time of exercising the options. Plus very few employees have these financial resources available thus causing 50% of employees to forgo their stock options, lose their hard-earned equity, and the right of participating in the future success of the company they helped to build.
By connecting startup builders with its Investor Community, EquityBee enables the builders to obtain all of the capital they need to exercise their stock options and pay the taxes, become a shareholder, and take part in the company’s success.
“As a serial entrepreneur and being part of the startup sphere for the last 15 years, I have witnessed countless employees, colleagues, and friends lose out on a significant part of their compensation because they couldn’t afford to exercise the options they worked so hard to earn. EquityBee is changing the situation and helping startup builders. We have successfully solved this problem for Israeli employees, and now EquityBee is ready to support every startup builder in the US,” said Oren Barzilai, CEO at EquityBee. “Our mission is to enable all startup builders to own their hard-earned equity and their share from the company they helped build.”
Barzilai and Golan are serial entrepreneurs and childhood friends. And Barzilai founded Tapingo, which was acquired by GrubHub in 2018 for $150 million.
The EquityBee Investors Community includes thousands of investors from all over the world, including family offices, funds, and accredited investors who are looking for a new way to invest in companies that were previously inaccessible to them. And the employee and the investors share a portion of any future exit gains.
EquityBee has worked well in the Israeli market and brings its global experience to the U.S. In the past year, EquityBee has helped hundreds of employees from over one hundred different companies including Taboola, MyHeritage, SimilarWeb, MagicLeap, and IronSource.
“The US is home to over 525,000 tech companies employing over 11.2 million tech workers of whom 6 million work for private tech companies. While inconceivable, as it stands today, a vast amount of these workers do not get to exercise or finance their stock options thus lose annually about $30 billion. This is why we invested in EquityBee. EquityBee aims to solve this massive market failure and help millions of employees realize what is rightfully theirs. The solution the company offers is a no brainer for all parties involved: the employees, the startup companies employing them and the investors using EquityBee. After witnessing their success in Israel, Group 11 is excited to be a leading backer of EquityBee in its important mission to help U.S. employees. The sky’s the limit for EquityBee and we’re excited to be on their team and Board of Directors,” added Dovi Frances, Founding Partner at Group 11.
Including this round of funding, EquityBee has raised a total of $8.3 million from Group11, Battery Ventures, LocalGlobe, and a number of CEOs and entrepreneurs. In connection with the funding round, Frances is joining the company board of directors.