PEER Guide

The Social Contract

Startup employees spend a significant portion of their life working on behalf of an employer. They’re expected to have an ownership mentality, be relentlessly resourceful, and sustain the effort needed to will a product into existence. Historically, their access to liquidity has not been commensurate with these outsized contributions. Founder and employee equity are often not treated the same, and this PEER document removes this imbalance to finally make venture fair for all. 

This document outlines best practices for employers to provide equitable employee liquidity. By pledging to become a PEER-driven company, an employer pledges the following to its employees:

• Deterministic liquidity of your shares
• Pragmatic transparency between founders and the employee
• Financial education on the value of your shares

By pledging to become true peers with their employees, startups will attract better talent that seeks fair equity, retain motivated team members longer, and help fix the inequality throughout the venture ecosystem.

Deterministic Liquidity

We pledge to give all employees who receive stock-based compensation deterministic liquidity. This means they will be given the opportunity to sell their vested equity in secondary sales on a predetermined schedule. Since future performance and market conditions are uncertain, we cannot guarantee a specific price or that there will be a liquid market. But we do pledge that we will make a good faith effort to find liquidity for you at a fair price on a regular basis.

Pragmatic Transparency

We pledge to be transparent with company valuation. This means we will tell you the most recent share price that investors invested at in a sanctioned primary fundraising round. You deserve to know what your equity is worth at all times.

Fair Window

We pledge to offer employees similar liquidity windows to founders. This means when founders sell, you should generally be allowed to sell as well. The details and terms may vary, e.g. sometimes not all employees will be able to access liquidity on the same terms, but maximizing peership is a key criteria for our liquidity events. 

Financial Education

We pledge to offer employees education and/or resources on the meaning of their stock-based compensation, the value it may be worth, and the potential tax implications. In order for you to be a true co-owner, you have to understand what you own.

No Golden Handcuffs

We pledge to avoid employee equity terms that will force you to lose already vested equity if you leave the company. A common example is the forfeiture of your vested options if you do not exercise within 90 days of departure, which is tough for employees who cannot afford to cost. When this is possible, we want to facilitate it. Employees should stay with a company because they want to, not because they’re afraid of losing the upside they’ve earned.

Not a Legal Contract

This is a set of aspirational commitments that we make public and take seriously. You can and should hold us to these principles. We commit to doing right by our employees and offering fair, transparent, and informed access to their economic upside.