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Here’s why Volt Lines has the best ESOP policy in Turkey

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I get asked by a lot of Founders and CEOs about our ESOP policy at Volt Lines to the point where my wife once joked about it saying you’ll end up becoming an ESOP consultant. Instead of turning this into a consultancy business, I plan to unpack in this article what makes a great ESOP policy and why I claim that Volt Lines has the best one in Turkey. I’d be happy to be proven wrong.

What is ESOP

First, let’s define ESOP real quick.

ESOP stands for Employee Stock Option/Ownership Plan, which in short, gives employees a way to become shareholders in the company they work at. If I want to oversimplify things, from a macro perspective, there are 2 sides of the economy; labor, and capital. ESOP gives the labor side exposure to the capital side which can be extremely empowering for the right kind of people. That is people who are ambitious, hard-working, and mission-driven.


ESOP is an extremely important wealth creation tool. Unlike a salary, equity (ESOP is a form of equity) is the best way to build wealth, as equity can go up thousands of times in value, while salaries/cash get gobbled up by our lifestyle.

Here’s a fun fact that drives the message home. If Christopher Columbus managed to somehow still be alive today, and while at it, managed to earn a $5,000 salary every single day since the day he discovered America (1492), he still wouldn’t be a billionaire.

Check out the math for this fun fact here, and just keep in mind the Elon Musk, who immigrated to the US in 1992, currently has a net worth of $289B as of the writing of this piece.

Despite these shocking facts, we interview a lot of people on weekly basis, and it’s surprising how almost nobody asks about ESOP. If you work in a tech startup, you deserve to have an ESOP. That’s a simple philosophy that I personally had from day one in Volt Lines, and I stick by it every day.

Unfortunately, not all startups offer their people ESOP, and not all people understand the true value of ESOP. In this article, I’ll focus on what makes an ESOP policy great, and I’ll happily cover the true value of ESOP in a separate article if it gets enough requests.

Not all ESOP policies are created equal.

While a lot of startups might claim to offer an ESOP policy, there’s a huge array of differences between ESOP policies. In a tweet by BeingPractical, he outlined in an amazing way what factors you should look at in an ESOP policy and what attributes these criteria can have.

Here is what makes an ESOP policy great, and how Volt Lines is fairing out on each criterion.

  1. To whom is the ESOP given: This one’s simple. All Volt Lines HQ employees get ESOP, irrespective of their level.
  2. Availability of flexible ESOP against the salary: ESOPs at tech companies usually start with an initial grant (e.g. $10,000 grant, made of 10,000 options with $1 per option as the strike price). However, the best practice offers employees the option to earn more ESOP against a reduced salary or slower salary increases. It’s another form of employees asking to be paid in equity, as Mrs. Carter famously said it here.
  3. Vesting period: 4 Years is the best practice, and that’s where we are at.
  4. ESOP pool size at inception: When Volt Lines was incorporated, I knew that, as a solo founder, I could never scale it to a multi-billion dollar company on my own. For that reason, I made sure that the ESOP pool of Volt Lines at incorporation was 20%. In other words, 20% of the company’s shares were reserved for future employees.
  5. Vesting schedule: The vesting schedule is the timeframe on which the options become rightfully owned by the employee. Volt Lines follows the best practice in which 25% of the shares vest in the first year (usually called The Default cliff), and then for the remaining 75% vest every month, releasing 2.083% of the granted options every month into ‘vested’ status.
  6. Allotment: Allotment, which simply means officially informing the employee of their granted shares, shouldn’t be linked to performance and should follow the time frame outlined in the initial grant agreement. If a company is following a 1-year cliff, followed by monthly vesting over an additional 3 years, it should follow that irrespective of the employee’s performance. If the employee is underperforming, it’s much better to understand the reason for the underperformance and fix that, or to split ways if you’re not a good fit for each other, than to delay allotment or put it on hold. At Volt Lines, we believe this helps us in building a high-performance culture.
  7. When vesting starts: Another simple one for us. At Volt Lines, vesting starts from the date of joining. Anything else, such as date of grant or at a certain band/level, falls short of the best practice.
  8. Top-up of ESOP: Top-up of ESOP means signing another grant agreement that adds more share options for the employee. At Volt Lines, this is defined for high performers that have grown significantly in their performance and added more responsibilities by the 24th month of vesting of their first grant agreement.
  9. Vesting on leaving the startup: Volt Lines alumni walk away with their vested options when they leave the company. We give people what they have earned.
  10. Vesting on Startup’s exit: In case of an exit (i.e. Volt Lines gets acquired by another entity), we follow the best practice of accelerated vesting. This means that if you were granted 10,000 options, and the company got acquired on your 24th month at the company, you get all 10,000 options, and not only your vested 5,000. Of course, this requires you to have active employment at the company at the time of exit, else you’ll get only vested shares.
  11. On Death or Disability: Volt Lines follows accelerated vesting in the case of the death or disability of an employee. I can’t believe that some ESOP policies do clawback in such cases, smh.
  12. Sales of vested stocks: This is the only criterion where Volt Lines doesn’t follow the best practice of allowing the sales of vested options without any permission. At Volt Lines, to sell your vested options, CEO + Board permission is required. We believe that it’s quite difficult to execute otherwise.
  13. Sales of ESOPs: Employees can sell their ESOP through our buyback program which happens whenever a Secondary round is possible. We’re hoping to make one possible in late Q1 of 2022.
  14. Buyback: As our ESOP matures, we will run periodic buybacks whenever a sizeable round is taking place as usually sizable rounds come with a Secondary.
  15. Strike price: We usually follow a discounted strike price to the actual value of the share on the primary market. That’s a good practice, but not the best. The best practice is to offer a $1 flat strike price, irrespective of the stage at which ESOP was granted. We disagree with the $1 approach as it dismisses the value created by employees at different stages of joining the company. An employee that joined Volt Lines in 2019 shouldn’t have the same strike price as an employee that joined the company in 2021. There was a hell survived in between :).
  16. Exercise period on leaving the organization: We don’t force an exercise period after the employee leaves the company. Employees can hold on to their ESOPs indefinitely.
  17. ESOP communication: Volt Lines currently has signed and written documents that communicate ESOP through a notification at the offer stage, a grant agreement at up/out, and a monthly slip that shows the current status of vesting. While it’s not the best practice, we’ve found this to offer the most value for money option available right now. Note that our grant agreements are signed under the Dutch jurisdiction on our B.V. level. This means our ESOP is governed by the laws of the courts of Amsterdam.
  18. Holding period: Like in point 16, we do not limit the holding period.

As clearly demonstrated above, Volt Lines matches most of the criteria listed above at an outstanding level. In simple words, a good ESOP policy shouldn’t feel like the watermelon below.

What to do with all of this information?

If you’re a founder in Turkey, please invest in ESOP! It’s the only way we can collectively build a rich and diverse ecosystem that attracts and retains the best talent from the bigger corporates.

If you work in tech and your startup isn’t offering ESOP, ask them to. A lot of founders want to do it but don’t know how to design it. This blog post covers pretty much all the criteria needed for a good ESOP policy.

However, your best next step could be joining our mission. Volt Lines is growing very fast in a multi-billion dollar local market dominated by traditional/inefficient players. On the other hand, the global smart bus market is transforming in full swing led by VC-backed startups that are completely reshaping the industry.

If you’re excited about making urban mobility more sustainable using technology, head over to our website to see our open positions. We’re going to significantly grow our organization size over the next 6 months, and I’m pretty sure there’s a position open for every skillset.

Ali Halabi
Founder and CEO | Volt Lines

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