Your transfer of a portion of your personal equity is governed by rules that your company has in place. In some cases, this could require approval. We can help explain to your company why participation in EquityPool is a win/win that helps ensure that you as an employee remains aligned with the interests of your company (by providing some measure of hedging against a loss that allows you more flexibility in pursuing an ambitious, long-term, high-value exit for the company — while building a helpful network and focusing on your company instead of financial worries).

You are welcome to apply and explore the opportunity, with no obligation to join a pool. We will help you meet like-minded equity owners, and explain the details of our program. Should you and others you meet through EquityPool (or know already) mutually agree to form a pool, we’ll be there to help.

The initial application process isn’t too time-consuming, and hopefully the questions are a fruitful chance to reflect on your own company. After applying, you’ll have a brief screening interview and chance to meet someone from the EquityPool team. If you’re a good for pool participation, and would like to be introduced to other prospective pool members we offer a round-robin, speed-dating type of introduction, or with other formats that facilitate the introductions you’re seeking, and offer opportunities for deeper follow-on conversation, collaboration, and diligence if you wish.

Pools are made by common collective agreement of the participants, so ultimately the answer to the question is, participants can decide to handle things as they prefer, and no one is required to do anything they don’t want to do. However, in general participants would elect to have everyone’s contributed equity valued according to its fair market value at the time of formation. Even if the company is relatively new or there have never been any transactions in the participants equity share class, fair market value can still be determined by various industry-standard methods that help participants to be assured that their ownership interest in the pool, in absolute terms and relative to others, is fair and equitable. EquityPool can help with this process. Full details are available to those who apply and are exploring the possibility of joining a pool.

Pools are formed by voluntary collective agreement, so in theory could be very small or large. A typical range for a pool might be 12 to 60 individuals from 8 to 40 companies. But groups are possible, and smaller, tight-knit groups, perhaps because they know each other already or want to focus on a narrow vertical, can also be accommodated.

It shouldn’t. Great builders don’t work purely to get to a financial milestone. Great builders want to make a big impact on the world.

When pool members hit milestones, it breeds a competitive spirit, or perhaps a sense of collective obligation, among the others who then want to live up to the benchmark set by their peers. This mechanic strengthens the entire group by design, generating an esprit de corps.

And as a practical matter, any breakthrough and exit liquidation is likely to happen down the road, when everyone has already been working hard on their companies, and in any case the financial available to the builder from success of their own venture would still remain a compelling opportunity.

Situations may vary, but most successful cases have a company that has raised institutional money, or capital from experienced angels beyond friends-and-family, and/or has a revenue-earning in the market.

It is an inevitable part of pursuing a high-risk, innovative entrepreneurial path that there is a meaningful probability of failure. Mitigating against the financial impact of this risk is part of the advantage of being in a pool. But the community matters too: members will get to know and trust each other, and perhaps find ways to work together. Employees from one company may wind up working for another, or one company may merge with another. One member may get guidance from others that helps steer a clear path to success. Ultimately the purpose of the pool is to benefit everyone from the accumulating social capital of their network, to be better builders and operators. But no matter how good the team and the business idea and execution, the outcome is uncertain. So the other purpose of the pool is to help mitigate financial risk by having everyone share in the financial outcome of the group as a whole — with the aspiration that even if most companies fail, as a whole everyone could come out ahead.

The equity contributed to a pool must be already vested and otherwise free of risk of forfeiture beyond the rights standardly established for common shareholders, except in the rare exception of pool members who collectively decide otherwise. So in the standard pool arrangement, the pool’s ownership of its equity interest in a company is not subject to revision due to a change in the status of the contributor.

Traditional angel investing requires post-tax cash to invest and requires efforts to generate deal flow, meet founders, conduct due diligence (typically on your own rather than with the benefit of of other potential investors), persuade companies to take your money, and maintain relationships so they are not merely a financial transaction. With EquityPool, you’re leveraging your illiquid equity, for diversified exposure to other great startups easily, and you get the benefits of of aligned entrepreneurs who are invested in helping you build your own company. In addition, most small-scale (syndicate) angel investors don’t have deep ongoing relationships with the companies (indeed often are prohibited from even identifying themselves to the company), and don’t have a shared mutual interest (the companies aren’t endeavoring to help the investor’s own company). Larger-scale angel investors can sometimes build that type of community, but even then it’s usually one-on-one with the angel and the companies, not an entire community advancing the entire as a whole. And to achieve that as an angel with twenty companies would usually require $500,000 to $1,000,000.

That said, if you are an experienced angel investor, we think that participating in a pool can be an important part of your portfolio and help contribute to your dealflow and your own success.