Penta saves its customers time by rolling all their financial activities into a single platform, so it’s no surprise the team looked to Capdesk for a similarly smart and efficient way to manage equity.
For Chief People Officer Dan Hardaker, however, the case for Capdesk goes much further. In a recent conversation, Dan explained why company ownership is a powerful people ops tool and endorsed Capdesk for German startups with virtual share option plans (VSOPs).
At the start of 2021, Penta managed employee equity internally, but past experience had taught Dan that if people operations were involved, share plans would be seen as a real benefit by employees.
When the time came to launch Penta’s VSOP, Dan explained the scheme at a company-wide meeting in an effort to maximise its impact. Still, many people had questions.
“We employ people in many different jurisdictions” he explained, “so lots of them weren’t familiar with equity grants. In the end, my team created an FAQ for everyone to refer to.”
Dan was also keen for the recruitment team to fully convey the power of equity to attract talent. He felt that equity should be a big part of the discussion when talking to potential candidates about joining Penta.
Rather than Penta’s talent team offering a successful candidate a fixed number of virtual shares, they lay out a full equity proposal. “This is unusual in startups," Dan explained. "Not everybody does it, but they should.”
In the early days of Penta, employee equity had only been allocated to certain leadership positions and everything was managed in Google Sheets. At the time, creating and issuing a few grants manually wasn’t a problem.
Today, Penta gives virtual shares to every employee so they can benefit from the future success of the company.
“At 20 total participants, it was fine to handle the share plan on a spreadsheet. Now we’re adding 15-20 new joiners to the share scheme each month, and couldn’t possibly manage it manually.”
With so many employees joining each month and many more in the pipeline, Dan turns to Capdesk to monitor Penta’s option pool.
“So long as I know how many full-time employees we want to hire, I can use Capdesk to keep an eye on the capacity of the virtual share pool,” he said, explaining how the platform helps him plan for workforce expansion.
For Penta employees, the first day is made even more special with Capdesk. Dan told us how he prepares each new starter’s equity grant digitally, ready for them to sign on arrival.
“When somebody starts at Penta, they open up their email and see an invite from Capdesk,” he explained. “They can sign the document right away. It’s a really smooth onboarding process and a strong employee experience, showing our people they’re valued from day one.”
Penta’s employee equity strategy doesn’t stop there, however. Next up is communicating the value of employees’ virtual shares as they grow.
“That way, our people can see the actual worth of their vested shares and those still to vest,” Dan told us. “That’s one of their incentives to stay with Penta.”
Although progress is underway, it’s still pretty complicated for German companies to give employees equity today. Issuing virtual shares – also known as phantom shares – is a complex process, and Dan was relieved to discover Capdesk would make things easier.
A team of Capdesk onboarding analysts reviewed Penta’s processes at the very beginning, and were able to reassure Penta's leadership team that everything would be handled in line with German regulations.
Dan recalled one notable instance with grant signing. In Germany, the issuer must sign the grant before the recipient, so this became an essential requirement for Penta’s equity software.
“Capdesk was able to cater to our needs and there were no problems,” Dan explained.
Offering advice to others in a similar position, Dan said, “If you’re going to grant virtual shares regularly, it’s worth automating the whole process as we did. It makes Capdesk an attractive offer for scaling businesses in the German startup ecosystem.”
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