# @raleighw on Instagram

- **Type:** Image
- **Original URL:** https://www.instagram.com/p/CxvouQgvt-Z
- **Gondola URL:** https://gondola.cc/posts/21571679-raleighw-instagram
- **Thumbnail:** https://img.gondola.cc/tr:w-,h-,fo-auto/thumbnails/4e79431a65.jpg
- **Posted:** 2023-09-28T17:43:56.000+00:00
- **Account Owner:** Raleigh Williams (@raleighw) — https://gondola.cc/raleighw

## Caption

This is a trick an investment banker told me about when I was about a year out from selling my company and didn’t want to bring in an expensive C-Suite.

1) Set up a phantom equity pool for your people.
Phantom equity is a way to give them a one time bonus in the event the company sells.
It makes it very easy to say “Hey I want to sell this business one day and I want you to get a piece of the upside.”

2) Phantom equity usually becomes 10-15% of the sale price and becomes a great tool to attract talent that is interested in exiting (Mine was 5% since we didn’t bring new people in).

3) When the company sells for $1M and you have net proceeds of $900k (Assuming $100k in debt/payables) $100k gets allocated to the phantom pool and divided amongst the employees.

4) They get all the benefits of ownership in a liquidity event without you having to give up voting rights, 83b elections, and all the other complications with trying to incentivize through common stock.

#businesstricks #financialhacks #financialadvice #employeeengagement #employeebenefits #employer #entrepreneurs #startupentrepreneurs

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## Tags

employer, startupentrepreneurs, employeeengagement, financialadvice, entrepreneurs, financialhacks, businesstricks, employeebenefits

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