Don't design a plan. Craft a strategy.
Designing a stock options strategy is not a legal exercise. It is a people's strategy exercise. Your own stock options design must flow from your values and vision. That is what gives it authenticity. That is what makes it yours.
If you don't find yourself leaving everything else aside and specifically contemplating only on this for long periods of time, alone and silently, then you are not doing it right.
Six dimensions.
When you start to design a stock options strategy, you need to consider six dimensions of your policy. Sometimes a few of these dimensions act like forces that run in opposite directions. Your job is to find the right balance — a balance that need not be the same as a very good friend's company, or another company that was recently successful. Don't imitate others. Your stock options design will flow from your own values and vision.
Why
Past or Future. Or Both.
Reward the past, the future, or both? If early teammates carried you through hard years, honour that. We use Gracias Options for the past and Growth Options for the future. Gracias use friendlier terms; Growth looks ahead. Many teams need both—documented separately so the story stays clear.
Who
Coverage with intention.
Should everyone get stock options, or only a few? This is not a math question. It's a culture question. Based on your values and vision — what kind of company do you want to build? Do the recipients have the maturity to appreciate what stock options mean? Understanding "if the company does well, I become rich" is not the same as appreciating the responsibility that ownership conveys. If someone is better motivated by immediate cash than a distant long-term reward, options may not be the right tool for them.
How Many
Attractiveness, not percentages.
Forget standard percentages and industry templates. A certain number or percentage of options has no meaning per se — what really matters is their financial value relative to the recipient's earning capacity. We use the Intended Benefit Through Options (IBO) method to determine the right number of options for each recipient. If the pool is too small to give attractive grants to everyone, reduce coverage — don't hand out peanuts that motivate no one.
What Price
The strike price is a statement.
Should your team board the bus at the current fair market value, or at a discount? If someone has been with you for two years and helped create value, should they get a discount? Should a new hire board at the current Fair Market Value or at a discount? These are the perspectives you need to balance. A deep discount can feel right, but it may carry accounting implications. There is no standard answer here. Only the right answer for your company, rooted in your values.
What Conditions
Vesting is earned, not automatic.
Vesting has three elements: Period, Schedule, and Conditions. The most common is four years with a one-year cliff. But your vision may dictate three, five, or longer. Should they vest equally every year, or in a back-ended manner — 10%, 20%, 30%, 40%? Should they vest merely on the basis of tenure, or should certain performance conditions be met? Company-level milestones like revenue and users, or employee-level parameters. These conditions define what "earning" your options actually means and how you can exercise them.
How Often
Rhythm over chaos.
Granting options to every new hire on their joining date becomes an administrative nightmare. A quarterly grant cycle is the rhythm most companies should follow. Whoever joins in April, May, or June receives their grant in July. The legal machinery — shareholder approvals, board resolutions — aligns naturally with quarterly board meetings. Clearly communicate this policy upfront. No surprises. No confusion. Just a disciplined, repeatable cadence.
You don't design a stock option strategy. You discover it.
When you follow this process and spend a lot of time thinking about it, you realize that your strategy reveals itself. Stock options have two key perspectives — emotional and financial. You address the emotional perspective by granting them to people who resonate with your values and vision, so they feel a sense of ownership.
But you also need to ensure that your stock options provide appropriate financial benefit. That is why the 6D framework exists — to ensure you are considering all aspects of the policy design.
Do not rush it. Take your time. But do it right.
Let us help you discover your stock options strategy.
The color of money is the same everywhere, but the color of values and vision differs with each company. Use your own color as a differentiator. Live your own story, not someone else's.
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