8 years ago, I decided to create Movify. It turned into an amazing adventure full of successes, failures and surprises. I started alone and had the chance to gather a team of very talented people. As a founder, I was the sole shareholder, up to now. I believe it's time to change that. Here’s why and how.
I believe opening the equity of the company is a great way to incentivise key people, reward performance, and most importantly build sustainable collaborations. An objective is also that key people have their skin in the game. In addition, this action fits well 3 out of 5 of our company values :
- Empower : turning employees into shareholders is an additional way to empower them in the company
- Share : opening the equity means sharing the value and future profits
- Grow : as the company grows, so will grow the new shareholders, both in terms of responsibilities and financially
History of the equity
I created Movify in 2013, and was therefore the only shareholder at that time. We actually have been bootstrapping for 8 years now. Our philosophy from the start was to only spend the money we have earned. We were lucky enough to be quickly profitable, so we never felt the need of raising funds to fuel our growth. The shareholder structure remained unchanged until now.
A long process
It has been 2 years now that I am considering and preparing the opening of the equity of Movify.
Throughout the years, several people voiced their interest to enter the equity of the company. Sometimes after several years of collaboration, sometimes right from the first recruitment interview. My experience is that the people that made this request were not the people I felt to be the right fit. To the contrary, I realised that the people with whom I would love to bring this adventure to another level, never asked. A good reminder for me to be proactive about this instead of waiting that people ask.
In Fall 2019, we experienced some friction in our management team. I considered, at that time, to open the equity as a way to realign all the parties in the same direction. In the end, I decided not to proceed as it would have been like a patch to repair the wheel of a bicycle. It would probably not have been a sustainable solution.
Today, we have a healthy and robust management team. I consider this to be a fertile ground to plant seeds, and consequently a good moment to open the equity.
Among companies that have decided to open their equity to their team, I felt particularly inspired by EASI and its Employee-Shareholder Model, as they pushed the model quite further than others. Big thanks to Salvatore Curaba, the founder of EASI, who shared very openly the details of their model during a lunch together. Salvatore also shares some insights about their model in his book "On m'a pris pour un fou: Aimer, Partager, Agir”. Thank you as well to my former colleague Christophe Verhaeghe, now Business Unit Manager & Proud Partner at EASI, who also shared interesting details on how such a system is perceived in the inside of the company, an insightful complement to the vision of the founder.
After the discussion with Salvatore, I felt that I had to pivot from a Call Options Plan to direct entry in the equity. I initially had in mind a Call Options Plan, which allows shareholder candidates to enter the equity in a 3 to 5 years plan, based on defined objectives. Salvatore opened my eyes that it is much more motivating for employees to enter the equity directly, rather than Call Options or Stock Options that can feel very intangible or not concrete for quite a long time period. On top of that, options are a more risky mechanism as taxes need to be paid upfront. In the event that the options are not converted into actions, all taxes paid would not be recuperated.
Another great help to mature and deliver such a plan, was the coaching by the Advisory Board of Movify. The Advisory Board is organised via Réseau Entreprendre / Netwerk Ondernemen, and it is composed of Harold Mechelynck (founder of Ogone), Miguel de Schaetzen (CEO of Eneco Wind), and previously Didier de Callataÿ (founder of Callataÿ & Wouters). They help me drive Movify forward, offer me mentoring in defining and executing the strategic directions of the company. In the process of opening the equity, they have tremendously helped me simplify the system and ensure consistency. A huge thank you to the 3 of them.
Movify becomes a Partnership
I am proud to announce that today marks an important milestone in the history of Movify as 3 new Partners are joining the adventure : Adrien de Pascal, Charles Regout, and John Casse.
One of the most challenging things to define was the audience within the company to whom the equity will open. My goal is to create team motivation, buy-in and retention, and of course not create unnecessary frustration within the company. It was hence critical to define very clear, understandable and undeniable selection criteria. Here are the 4 entry criteria I chose for :
- You have a management position at Movify (Director or Manager level)
- You deliver performance in your role
- You are an ambassador of our values
- You are aligned with Movify growth ambitions
Another sane criteria could be to have 2 years of seniority within the company, including 2 positive yearly reviews. I finally chose not to use the seniority criteria now.
The people matching the entry criteria were given the opportunity to invest in Movify an amount of their choice, between 5.000 EUR and 100.000 EUR each. The objective of such a wide range was to give a maximum of flexibility and to allow them to determine an amount with which they would feel totally comfortable, depending on their personal financial situation and their potential intention to contract a loan or not.
The new shareholders of Movify do not receive any extra rights, only duties. Except having access to dividends of course, they will have the right to be informed, for example at Quarterly Shareholder Meetings. But they will not hold more decision power than they already have today. Contrarily, the new shareholders will assume more duties, such as being even more a positive driver of the company and an ambassador of our values.
As an objective of this partnership is to build an involved and motivated team, this can only be achieved with shareholders that are active in the company. It is therefore the intent that the new shareholders will remain shareholders only while they contribute to the construction of the company and remain active employees.
My only regret in that wonderful journey is the low diversity in the shareholders of the company. I believe a team can only be reinforced combining all the differences into one unique driving force. I am confident this will evolve in time for the better.
This is just the first step in a new direction. My dream is to enlarge the circle much wider. I like to think big and start small. This small first step will prove this partnership successful, or not. And as an agile team, we might either do more of this by organising future iterations, or pivot for continuous improvement.