How can I adopt an option plan through Gust Launch?
Gust Launch Raise includes both 409A valuations and Equity Incentive Plan adoption. To be eligible to use Gust Launch Raise, you must have incorporated through Gust Launch and not have created an option plan off-platform. You must also have issued common stock through Gust Launch.
The first step in creating an Equity Incentive Plan is to determine the size of your option pool. Gust Launch allows startups to allocate up to 15% of their ownership to the EIP, but there are many considerations behind the strategy of option plan sizing. For more information, please consult “How many shares should I allocate to my option plan?”
Once you’ve decided how many shares belong in your option pool and are ready to request a 409A report, the rest of the work to prepare for your EIP is just housekeeping. First, both Gust Launch and our valuation provider partner, Preferred Return, need to know about any fundraising you’ve completed. If you’ve conducted fundraising outside Gust Launch, just reach out to us and we’ll make sure all your instruments are recorded on your cap table and provide that information to our valuation partners. Second, you’ll need to prepare the materials necessary to assemble a 409A report. We’ll take care of securely transferring the documents you need that are already in Gust Launch, and if you use us for financial management, we can also provide your balance sheet and financial statements. You’ll need the following:
- Balance Sheet at the end of last month (two months preferred)
- Trailing 12-month Income Statement (for one year prior to valuation date. Excel Trailing 12 months' preferred.)
- One-year Financial Projection (if sales are less than $2M. 3 years if greater. Excel preferred.)
- Company Presentation, Business Plan, or Executive Summary (a marketing or investor pitch deck explaining the business model, or a press kit.)
- Bios for your management team
Optionally, you can also provide any further documents that you feel would help with the valuation process, but most companies receiving their first valuation won’t need additions to the list above.