Two former senior leaders at Manchester-based AI company Peak AI have launched a new venture to help ambitious SMEs accelerate growth by implementing effective share option schemes. John Fraser, previously Peak’s finance director, and Rachel Westwell, its former head of legal, have founded equiCraft to design, manage and optimise equity-based reward structures for growing businesses.
The pair oversaw Peak’s sale to US-listed AI software group UiPath earlier this year and previously built and operated the company’s equity schemes through $120m of investment rounds, including backing from SoftBank. Drawing on this experience, equiCraft will work with start-ups, scale-ups, C-suite leaders, founders, private equity firms and venture capital investors across the UK to support talent attraction, retention and long-term team incentives.
Rachel Westwell, based in Saddleworth, said: “The UK start-up scene is booming, and competition for talent is intensifying, leading to equity schemes becoming critical for attracting and retaining the best people. They enable new businesses, which are usually protective of cash and unable to pay top salaries, to attract the world-class talent they need by offering an alternative form of compensation. They can also be used to incentivise and retain, with additional option awards being an efficient way to reward employees at key milestones in place of bonuses. Bonuses put pressure on the company’s cashflow, and share options are often more attractive to employees as they can grow in value over time. Moreover, they are much more tax-efficient when granted under an HMRC-approved Enterprise Management Incentives scheme.”
She added: “Generally, share options are awarded according to a vesting schedule, with employees being entitled to a part of their grant annually over a number of years. “This provides a greater incentive to stay with the company on its growth journey for longer – if they leave early, they won’t receive the full value of their award. “In a successful start-up, that could make a big difference to the amount the employee will receive, from several thousands pounds to tens of thousands. “Furthermore, equity schemes aren’t just about hiring and retaining talent. Equity can play a significant part in building an engaged team who adopt an ownership mindset. “With everyone aligned towards the same goal of success, ultimately all shareholders benefit as the value of everyone’s equity grows.”
John Fraser said: “We’re using our experience when it comes to successfully managing equity planning, to help people avoid costly mistakes. We do this by designing schemes tailored to the team, the growth plans and vision, implementing them and then managing the day-to-day operation of them so they stay on track to suit the business as it evolves, and finally by optimising them, ensuring they are reviewed and refined to keep them effective.”
“There’s a clear pattern to the problems faced by companies when managing equity. External advice tends to be fragmented and not enriched by industry experience. Templated equity solutions flood the market but often lead to long-term complications and unintended consequences. Start-ups often have a lack of knowledge and experience of implementing and managing share option schemes, which can lead to compliance risks. We’ve been in their shoes and we know the journey, the pitfalls and, vitally, the solutions, and we want to use our experience to help founders and executive teams to design and run share option schemes that actually work for their teams and for the long run. The initial reception has been hugely positive as we fill a clear gap in the market by offering a powerful blend of finance, legal and HR equity support delivered by specialists with start-up experience.”
