How to Get a BSPCE Valuation for Your Startup’s Employee Share Plan

BSPCE (Bons de Souscription de Parts de Créateur d’Entreprise) are a special type of employee stock warrant unique to France. They give employees the right to buy shares of a startup in the future at a fixed price, known as the strike price. French startups widely use BSPCEs as part of their compensation strategy to attract and retain talent, because they allow employees to share in the company’s future growth with significant tax advantages.

This guide explains what BSPCEs are, how they compare to other equity incentives (like free shares/AGA, stock options, or RSUs), and the process of obtaining a BSPCE valuation. We’ll also cover the legal requirements (fair market value, documentation, audit readiness) and show why an accurate, compliant valuation is crucial to maintain the tax benefits.

Finally, we highlight how you can get a BSPCE valuation step-by-step, through a collaboration between Equidam & Futurz, and how to work with your legal/tax advisors throughout the process.

What Are BSPCEs and Why They Matter

BSPCEs in a nutshell: A BSPCE is a warrant that allows its holder (an employee or certain other contributors) to subscribe to new shares of the company at a preset price, typically after a vesting period. In essence, BSPCEs work like stock options – the employee can “exercise” the BSPCE to buy shares at the strike price, hoping the company’s share value will be higher by then. If the startup’s value grows, the employee stands to benefit by purchasing shares at a below-market price and later selling them at a profit. This makes BSPCEs a powerful tool for motivating team members in high-growth startups.

Tax benefits: BSPCEs are favored in France for their extremely attractive tax treatment. Employees owe no tax at grant or exercise; taxation only occurs when they eventually sell the shares, and only on the gain (the difference between the sale price and the strike price). Even then, the rate is a flat capital gains tax (approximately 30% total, including social charges) if the employee has been with the company for at least three years. Employees who leave sooner (tenure under 3 years) face a higher rate (about 47% total) on the gain. In other words, an employee can exercise their BSPCEs and hold the shares without any immediate tax hit, and only pay taxes when they cash out – a huge advantage for startup team members’ cash flow and long-term incentives. For the company, BSPCE grants do not trigger any employer social contributions, making them cost-effective compared to other plans. This win-win tax treatment for both employee and employer is why BSPCEs are considered one of the most favorable equity schemes in Europe.

Who can use BSPCEs: Not every company can issue BSPCEs – they are reserved for relatively early-stage, private French companies meeting specific criteria. To qualify, the company must be a French joint-stock company (e.g. SAS or SA) that’s subject to corporate tax in France, not older than 15 years since incorporation, not a large public company (either unlisted or with a market cap under €150 million), with at least 25% of its shares held by individuals (or their holding companies). These eligibility rules ensure BSPCEs are used by true startups and growing businesses (not mature firms) given the generous tax perks. Beneficiaries of BSPCEs are typically employees and executive managers of the company (and since 2019, also employees of its subsidiaries), as well as certain board members – essentially the people actively involved in building the company. In sum, BSPCEs are designed for startup teams, offering them a stake in the company’s future growth under very tax-friendly conditions, so long as the company and grants meet the legal requirements.

BSPCE vs. AGA, Stock Options, and RSUs (How It Differs)

France offers a few different equity incentive instruments. It’s important to understand how BSPCEs compare to other mechanisms like AGAs (free share awards), standard stock options, and RSUs:

• BSPCE (Startup Warrants): Available only to eligible young companies (as described above) and their startup teams.
  • Taxation: No tax for the company or employee at grant or exercise; the employee is only taxed at sale of shares, at favorable capital gains rates. If held ≥3 years, gains are taxed ~30% flat (including social charges); if <3 years, ~47%.
  • Cost: No social security contributions due by the employer on BSPCE grants, and employees pay nothing to receive the BSPCE. They may pay a small exercise price in the future to buy the shares (often set at the current fair market value).
  • Key benefit: Highly attractive and low-cost for startups and employees, making BSPCEs very popular in French startups.
• AGA – Free Share Awards (Attributions Gratuites d’Actions): These are grants of company stock for free, subject to conditions. Typically, an AGA (often analogous to RSUs) requires a minimum 2-year vesting period and an additional holding period to qualify for tax advantages.
  • Taxation: If conditions are met, the employee is taxed at the time of sale of shares (similar philosophy to BSPCE). However, free share plans usually trigger some tax and social charges at the moment shares vest or are delivered. In fact, free shares incur tax for both the employer and the employee as soon as they’re issued (vested). Employers owe a social contribution (around 20–30% of the shares’ value) and employees may owe income tax on the value of shares received (the “acquisition gain”), in addition to capital gains tax on any further increase in value when the shares are sold. Recent reforms have capped some taxes for free shares (e.g. a flat 30% tax on the gain up to a certain amount), but free share (AGA) plans remain costlier to the company due to employer charges and can create an earlier tax event for employees. Companies that don’t qualify for BSPCE or international companies often use free shares/RSUs to reward French team members, but they must carefully structure these plans under French law to get the deferred taxation benefits.
• Stock Options (French “SO” plans): France also has qualified stock option plans (distinct from BSPCE). Like BSPCEs, stock options give an employee the right to buy shares at a fixed price in the future. They are not limited to younger companies – any French joint-stock company can implement stock options – but the process is more cumbersome and expensive, often involving shareholder approvals and significant employer contributions on the option gain. Under qualified plans, employees are usually taxed at sale of shares (not at exercise) similar to BSPCEs, but the employer must pay a sizable contribution (up to 30% of the gain) at exercise or vesting. Due to these costs, early-stage companies tend to prefer BSPCEs over standard stock options. Stock options might be used by later-stage companies or those that just miss BSPCE eligibility. They share the same concept (strike price, vesting, exercise), but BSPCEs have a clear edge in tax efficiency for startups.
• RSUs (Restricted Stock Units): RSUs are commonly used in U.S. and global tech companies. In France, an RSU plan for employees would generally be treated as a form of free share award (AGA) if set up to comply with French rules. This means the RSU will have a vesting period (and possibly holding period) and, if structured correctly, the employee is taxed only at sale of the shares (with employer/social charges at that time). However, if a French employee receives RSUs from a parent company without a compliant French sub-plan, the vesting of RSUs could be taxed as salary (which is typically how RSUs are taxed in countries like the US or Germany). In short, RSUs in France should be integrated into an AGA-style plan to benefit from France’s tax-deferral approach. Otherwise, they can lead to immediate taxation at vesting, which is far less attractive. International startups with French subsidiaries need to be aware of this and often seek a BSPCE or French-approved plan alternative for their French employees to maximize tax efficiency.

Summary: BSPCEs offer the most founder- and employee-friendly terms among French equity incentives – no upfront cost, no employer taxes, and capital-gains tax treatment on the back end. Free shares (AGAs/RSUs) and standard stock options can still be useful (especially if a company doesn’t qualify for BSPCE), but they come with additional conditions, earlier taxation points, and higher cost to the company. This is why BSPCEs have become the go-to for French startups, and why it’s critical to set them up correctly – starting with a proper valuation.

Legal Requirements for BSPCE Valuation (FMV and Documentation)

Because BSPCEs are so tax-advantaged, French law has put safeguards in place to ensure they are granted fairly. The key legal requirement is that the BSPCE’s exercise (strike) price should not be undervalued – it should reflect the fair market value (FMV) of the company’s shares at the time of grant. In practice, before issuing BSPCEs, you need to determine your company’s share FMV and set the strike price accordingly. Companies typically do this by conducting a valuation analysis or obtaining an external valuation report. In fact, prior to recent reforms, French rules explicitly tied the BSPCE strike price to either the company’s latest valuation or the last funding round price (if the round was within the past 6 months). Today, there is a bit more flexibility (you can account for certain discounts or changes, as discussed below), but the principle remains: the strike price must be set in good faith based on an objective FMV. Under no circumstances should the strike price be set “symbolically” low or below the true value, as that would give the employee an in-the-money option and could be viewed as an immediate taxable benefit. French tax authorities focus on this point, since a strike price below fair market value essentially means giving free money to the employee (which would normally be taxed as salary).

Fair Market Value (FMV): For a private startup, FMV isn’t quoted on a stock exchange, so it must be estimated. Accepted practice is to either use the price per share from a recent qualified financing round or to perform a financial valuation of the company if no recent round is available. Often, companies will use the latest funding round as a reference, *especially* if it was an arm’s-length round with professional investors in the past few months. If that round is older (or the company hasn’t raised equity recently), a fresh valuation is needed using standard methods (like DCF or comparables – more on these shortly). Even if a recent round exists, companies might adjust that price to account for differences between the investors’ preferred shares and the common shares given to employees. For example, if investors bought preferred shares with special rights (liquidation preferences, etc.), the ordinary shares for employees could justifiably be valued at a discount to the preferred price. Other factors like any decline in market conditions since the last round or the illiquidity of startup shares can also warrant a discount on the FMV. The French tax code doesn’t prescribe an exact formula, but it expects the valuation to be derived from “objective methods” and reasonable assumptions.

Documentation and audit preparedness: Unlike some countries (for instance, the UK, where HMRC can agree on an EMI option valuation in advance), France does not offer any official pre-approval or “safe harbor” for BSPCE valuations. The onus is entirely on the company to get the valuation right and be prepared to defend it. This means you should document your valuation thoroughly. If you set a strike price equal to your last funding round’s price, keep records of that round (term sheets, price per share). If you apply a discount or use a different valuation method, it is highly recommended to have an independent expert report backing up your number. In fact, French guidance suggests that whenever your BSPCE strike price *differs* from the most recent financing valuation, you should obtain a professional valuation report to justify the difference. This report will detail the methods used and show that the FMV was determined objectively. Should the tax authorities audit your plan, they will look for this support. If you cannot justify the strike price (for example, if you arbitrarily picked a very low price without evidence), the authorities can requalify the BSPCE grants as taxable salary. That would be a nightmare scenario – it would mean employees owe income tax on what was supposed to be a tax-free grant, and the company could owe back payroll taxes and heavy social charges, plus penalties. To avoid that, make sure you retain all documentation: the valuation report, board resolutions approving the BSPCE grant (which should reference the valuation), and any relevant data (financial statements, cap table, comparable company data, etc.) used in the valuation. Essentially, treat a BSPCE valuation with the same rigor you would a formal 409A valuation in the US or an audit – it must be defensible and grounded in accepted valuation techniques.

Valuation Methods Accepted by French Tax Authorities

How do you actually value a startup for BSPCE purposes? There’s no single formula, but French tax authorities accept a range of standard valuation methodologies, similar to those used globally for startup valuations. The goal is to determine a fair market value for the company’s ordinary shares (since BSPCEs give rights to ordinary shares typically). Here are the common approaches and considerations:

• Discounted Cash Flow (DCF): The DCF method projects the company’s future cash flows and discounts them back to present value. It’s a fundamental valuation approach grounded in the company’s expected future performance. For startups, cash flow projections can be tricky, but a well-argued DCF (even with scenario analyses) is a respected method and is widely recognized by valuation professionals and auditors. If you have financial projections, a DCF will use those to estimate what the business is worth today, which in turn informs the share value.
• Comparables (Market Approach): This involves looking at comparable companies – either publicly traded peers or recent acquisitions of similar startups – to infer your company’s value. For example, you might use ratios like EV/Revenue or EV/EBITDA from public companies in your sector, or price multiples from recent funding rounds in the market, and apply them to your metrics. The French tax authority is open to this approach as long as the peers are reasonably chosen and the adjustments are explained. It gives a market reality check to the valuation. Often, startups will cite their last funding round’s valuation as a key comparable data point (since it reflects what investors paid for a stake). In fact, as mentioned, if your last round was recent (within 6 months), using that price per share is common practice. Just remember to adjust for differences (e.g., if those investors got preferential terms).
• Asset or Cost Approach: This is less relevant for high-growth startups (which derive value mostly from future earnings, not current assets), but in some cases an asset-based approach might be considered. For instance, if your startup is pre-revenue or in a turnaround, you might value it based on its net assets or replacement cost. However, most startups raising BSPCEs will rely on income or market approaches rather than asset-based values (which often undervalue a going concern).
• Option Pricing Method (for share classes): If your capital structure includes multiple classes of shares (e.g., you have preferred shares from investors alongside common shares), a valuation allocation method is needed. French startups frequently have preferred shares with liquidation preferences, meaning not all shares are equal in value. In such cases, a technique like the Option Pricing Model (OPM) is used to allocate the enterprise value between share classes. This method, often implemented via a Black-Scholes model, treats the preferred shareholders’ rights as akin to options, and calculates the implied value of the common shares given those preferences. The result is that the common shares (and thus BSPCE underlying shares) might be valued at a significant discount to the price investors paid for preferred shares, especially if the preferences would give investors priority in a liquidation event. Using OPM or a Probability-Weighted Expected Return Method (PWERM) to account for different exit scenarios are both accepted practices to derive a fair value for common stock in line with international valuation standards (IPEV guidelines). The key is to capture the economic differences in the shares, so you’re not over-valuing what employees get.
• Discount for Lack of Marketability (Illiquidity): Shares in a private startup are illiquid – an employee can’t easily sell them before an exit event. Therefore, after you estimate a base share value (from DCF, comparables, etc., and after considering any preferred share preferences), it’s typical to apply a discount for lack of marketability (DLOM). This accounts for the fact that the shares can’t be readily traded. French valuations regularly include an illiquidity discount, which might be on the order of 10%–30% (sometimes determined via option pricing models for a theoretical put option). The exact percentage can vary, but the concept is recognized by tax authorities as long as it’s justified (e.g., via studies or standard tables). The illiquidity discount further lowers the fair value of the shares for the employee plan, which is reasonable and helps ensure the strike price is not set too high relative to what those illiquid shares are worth.

In practice, many valuation experts use a combination of methods to triangulate a fair value. For instance, Equidam’s platform itself uses five methods (including DCF and comparables) and averages them for a balanced result. What matters is that the methodologies are sound and well-documented. When you present a valuation report, it might include several approaches and then explain which one was weighted more and why. French authorities don’t mandate a single method, but if challenged, they will want to see that you didn’t just pick a number out of thin air or only use a rosy scenario. A robust analysis with multiple methods provides that assurance of objectivity.

Why Solid Valuations Are Crucial (Maintaining Tax Benefits)

Getting the valuation right is not just a formality – it is crucial to preserve the tax-advantaged status of your BSPCE plan. As discussed, if the strike price is set too low without justification, the tax authorities may view the BSPCEs as a disguised bonus rather than a genuine investment by the employee. The consequences of a misvaluation can be dire: the BSPCE grants could be reclassified as ordinary salary income. In that scenario, the employee would suddenly face income tax (and social charges) on the value of the options at grant (which defeats the whole purpose of a stock option incentive) and the company could be liable for employer social taxes and penalties on that amount. Essentially, all the special tax treatment is lost if the plan is found non-compliant.

Accurate, defensible valuations protect against this outcome by demonstrating that the strike price was fair. When you have a solid valuation report in hand, you can show that, for example, a 20% discount to the last round price was justified due to preferences and market conditions – and not an arbitrary lowball to give a hidden perk to employees. It also ensures that employees truly get the intended tax benefit: no tax until they sell, and then the lower capital gains rate. If a company were to accidentally set the strike price above fair market value (which is less common but possible), that would make the options less attractive (employees might pay more than they should to exercise). So accuracy cuts both ways – not too low (to avoid tax risk) and not too high (to ensure the incentive value).

Furthermore, a credible valuation fosters trust with your stakeholders. Investors and board members take comfort in knowing the company isn’t inadvertently creating future liabilities. Employees can trust that their equity award is set up properly and won’t come back to bite them at tax time. And if you ever have an external audit or due diligence (e.g., an investor or acquirer examining your company), having well-documented BSPCE grants with a solid valuation report will tick an important compliance box.

In summary, BSPCE valuations should be approached with rigor and professionalism, not as a checkbox. By investing the effort (or using expert services) to get an accurate valuation, you are effectively buying “insurance” that the plan’s tax advantages will hold up. This keeps both the company and your team safe from unpleasant surprises, ensuring the BSPCE remains the valuable reward it’s meant to be.

Equidam & Futurz: Founder-Friendly BSPCE Valuation Solution

Conducting a valuation may sound daunting, but this is where Equidam can greatly simplify the process for founders. Our online startup valuation platform that has become a popular choice for equity compensation valuations due to its ease of use, speed, and compliance features. In the context of BSPCEs, through our collaboration with Futurz, Equidam distinguishes itself as a founder-friendly provider for several reasons:

• Streamlined Online Process: Equidam’s platform lets you input your company’s financial data, projections, and cap table information in a guided interface. It then applies multiple valuation methods automatically to calculate your startup’s value. This saves you from having to manually crunch numbers or hire a big accounting firm for a full valuation study. The result is a quick turnaround – important when you’re trying to grant options on a tight timeline.
• Compliance and Local Expertise: While Equidam is a global platform, it recognizes local requirements. Equidam collaborates with leading local valuation experts to deliver valuations that meet compliance standards. In practice, this means your valuation can be reviewed or augmented by a valuation professional (for example, Equidam partners with firms like Futurz and Equify in France) to ensure it aligns with local tax expectations. You get the best of both worlds: an efficient online valuation and an expert-backed report that you can confidently present to auditors or authorities. Equidam’s methodologies are compliant with international valuation guidelines (IPEV), and by adding French expert input, they make sure your BSPCE valuation stands up to scrutiny.
• Cost-Effective and Transparent: Traditional valuation services (e.g., hiring a Big Four firm for a private valuation) can be very expensive for a startup. Equidam positions itself as more affordable and founder-friendly, with transparent pricing. You’re not paying for a months-long consulting project – you’re leveraging technology and data for a fair price. Especially for early-stage companies watching their budget, this makes a BSPCE valuation accessible without compromising quality.
• Founder Control and Speed: With Equidam, founders remain in control of their data. You can experiment with different scenarios on the platform (for example, updating projections) and see the impact on valuation, which gives you insight into how the valuation is derived. The speed is a major plus – what might take weeks via traditional appraisal can often be done in days or even hours with Equidam’s system (plus the time for an expert to finalize the report). Fast valuations mean you can grant BSPCEs to new hires or existing employees without delay, keeping your compensation plans on schedule.

Step-by-Step: Obtaining a BSPCE Valuation Through Equidam

Getting your BSPCE valuation via Equidam can be done in a few straightforward steps. Below is a step-by-step guide to the process, along with best practices at each stage:

1. Prepare Your Company Data
   Start by gathering the key information you’ll need for the valuation. This includes your cap table (list of all existing shares, investors, and equity instruments), details of any recent funding rounds (valuation, price per share, investor rights), and your financial statements or projections. Make sure you have up-to-date financials and a business plan that outlines your growth expectations – these will feed into a DCF or other models. Equidam will ask for a blend of qualitative and quantitative (financial model) data to run its valuation methods. Having this data ready will make the process smoother. Tip: Double-check your cap table for accuracy; since the valuation is on a per-share basis, you want the share count and classes correct. If you use an equity management platform (like Equify or Carta), export the latest cap table. Also, consider any factors that might affect your share value (e.g., if you know your last round had preferential terms, note that down).
2. Initiate a BSPCE Valuation on Equidam
   Get started with your BSPCE Valuation. You’ll typically create an account and enter basic company details. When prompted, indicate that you need a valuation for BSPCE (France). Equidam will ask a few specific questions (like whether you qualify for BSPCE and the date you plan to grant options) to tailor the process. Then, input the required data: you’ll fill in financial metrics, answer qualitative questions about your business, and upload or input your cap table information. The platform is user-friendly, with a checklist of sections to complete. As you fill this in, Equidam’s engine starts applying its five-method valuation model in the background. Don’t worry if you’re not a finance expert – the interface guides you on what numbers to provide (and there are help articles if you get stuck). Take care to provide realistic inputs (e.g., don’t overly inflate projections, as the valuation should be credible). Equidam uses several methods (DCF, comparables, etc.) and weights them, which provides a balanced valuation.
3. Let Equidam and Futurz Do the Analysis
   Once you’ve entered everything, Equidam will compute a preliminary valuation. In the case of a French BSPCE valuation, this is where Futurz comes in. Essentially, they will ensure the fair market value per share is calculated in line with French norms and that any discounts (for preferences or illiquidity) are properly applied. This might involve an expert checking the cap table to see if an option-pricing allocation is needed – e.g., if you have preferred shares, they’ll perform that allocation so the common share value is correctly derived. Equidam’s platform provides the data and baseline calculations, and the experts add the compliance layer. From the founder’s perspective, this step is hands-off – you might get an email if they have clarifying questions, but otherwise you wait briefly while the valuation is finalized. This step typically results in an expert valuation report being prepared.
4. Receive Your Valuation Report
   Futurz will deliver a BSPCE valuation report, which typically includes the calculated fair market value (FMV) per share of your company and the recommended strike price for your BSPCE grants. The report will outline the methodologies used (for example, it may show a DCF valuation, a comparables valuation, and how they reconciled it, including any discounts applied). This documentation is crucial – it’s your evidence that the valuation was done rigorously. Review the report carefully. Ensure you understand the conclusions and the number (ask questions if something looks off; e.g., if the value seems too high or low compared to your expectations or last round, discuss it with the Equidam team/experts). The final strike price is often set equal to this FMV per share (some companies choose to round it or even set a slightly higher price for simplicity, which is fine as long as it’s not below FMV). With this report in hand, you now have what you need to proceed with granting BSPCEs. Importantly, store this report securely – you will need to produce it in an audit to prove how you arrived at the strike price. It’s also wise to share it with your board for transparency.
5. Consult Your Legal/Tax Advisors and Approve the Plan
   Before you formally grant the BSPCEs, loop in your legal counsel or tax advisor to review the valuation and the overall BSPCE plan. This is a best practice to ensure everything is compliant. Your lawyer will want to ensure that the board of directors approves the BSPCE grant and strike price in a board meeting or shareholder meeting (as required by French law). They may incorporate language into the meeting minutes referencing the valuation report and the determined FMV. By having the board formally adopt the strike price based on an expert valuation, you create a strong paper trail of due diligence. Share the Equidam valuation report with your attorney and your accountant. Typically, they will check that the assumptions make sense and that the valuation date aligns with the grant date. French law requires that the issuance of BSPCEs be authorized by shareholders and that certain filings are done, so your legal advisor will take care of those formalities – but they will rely on the valuation to fill in the strike price and possibly to mention the total value of the plan. If any questions arise (for instance, “why did we apply a 30% discount to the last round price?”), be prepared to answer them or get clarification from the Equidam team. Usually, the report will explain it. Getting your advisors’ buy-in now will save you headaches later; they’ll be the ones to defend the plan if there’s any scrutiny down the road. Once everyone is comfortable, proceed to officially grant the BSPCEs to your employees (often through grant letters or an equity management platform).
6. Implement the Grants and Maintain Records
   With the valuation done and advisors on board, you can issue the BSPCE warrants to the intended employees. Each employee will get an agreement or grant notice specifying their number of BSPCEs, the strike price (as determined), vesting schedule, etc. This is more on the legal implementation side, but from a valuation standpoint your job is largely done – just make sure *the strike price in all documentation matches the valuation*. Going forward, keep the valuation report and supporting documents on file. In France, BSPCE valuations are considered valid for at most 18 months (since companies only have 18 months to grant options from an approved pool) or until a major event (like a new funding round) occurs. This means you should plan to update the valuation periodically. A best practice is to diary 18 months from the valuation date (or sooner if you anticipate a big change) to do a refresh. With Equidam you can easily update valuations – often you’d just input any new data (if your revenues grew, or if you raised money, etc.) and get a new FMV for the next grants. By doing this, you’ll always be granting BSPCEs at a current fair market value, keeping you in compliance. Also, if any employees exercise their BSPCEs, inform your accountant as there might be some reporting to do (and eventually, when shares are sold, the valuation report might be referenced to calculate the gain). In essence, treat the valuation as part of your ongoing compliance checklist for equity. It’s not a one-and-done if you plan to issue more options down the line.

Working with Legal and Tax Advisors: Best Practices

While Equidam and similar tools greatly simplify the technical side of valuation, you should still involve legal and tax professionals at critical points. Here are some best practices for collaborating with advisors on BSPCE matters:

• Involve Advisors Early: Let your lawyer know you plan to set up a BSPCE plan and will be obtaining a valuation. They can advise on any specific French legal requirements (for example, the wording of shareholder resolutions to authorize BSPCEs, or checking that you meet eligibility criteria). Early input can prevent mistakes – such as accidentally granting to an ineligible person or exceeding caps.
• Validate the Valuation Assumptions: Once you have the draft valuation (even before the final report), review it with a savvy advisor or even a board member if they have finance expertise. If something seems unusual (e.g., an assumption about the company’s growth or an unusually large discount), discuss it. It’s easier to adjust assumptions before everything is finalized. Your tax advisor might have insight into what discount rates or methods the French tax administration typically expects to see, which can be fed back to the valuation team.
• Document Advisor Sign-offs: It’s wise to have your legal counsel provide a short memo or email that they have reviewed the valuation and the plan documents. While not legally required, this creates an extra layer of defense showing you acted in good faith and with professional guidance. If your auditors or accountants are involved, have them place a copy of the valuation in the audit file with a note that they concur with its use for BSPCE pricing.
• Board Approval and Minutes: Make sure the board of directors (or equivalent governing body) formally approves the equity plan *and* the strike price. The board minutes should mention that the strike price per share was determined based on a valuation of the company’s shares as of [date]. Attaching a summary of the valuation or noting the firm (or tool) used (e.g. “based on a valuation report provided by Equidam, determining fair market value at €X per share”) adds to the paper trail. These minutes will be an important exhibit if questions ever arise.
• Stay Updated on Regulations: French laws and tax rules can evolve (for example, recent finance acts have modified BSPCE thresholds and tax rates). Advisors can keep you informed if, say, the holding period for tax breaks changes or if a new guideline on valuations is issued. This way, you can adjust your plan or valuation frequency accordingly. An example is the 2020 Finance Act extension that allowed international startups’ French employees to get BSPCEs – knowing such updates can be crucial.
• Plan for Exits or Cross-Border Issues: If your startup might relocate, get acquired by a foreign company, or you intend to grant options across different countries, get advice on how the BSPCEs will be treated. Sometimes advisors can suggest actions like accelerating vesting or exercising before a change that could affect the tax status. Also, if you have a U.S. parent company, ensure your French advisors coordinate with U.S. advisors so that your 409A (US valuation) and BSPCE valuation don’t inadvertently conflict (they may legitimately differ, but both should be supportable).

BSPCE Valuation Checklist (Summary)

To wrap up, here’s a handy checklist you can use when pursuing a BSPCE valuation and implementing your plan:

• [ ] Confirm BSPCE Eligibility: Ensure your company meets the criteria (e.g. SAS/SA structure, <15 years old, not a large cap, proper shareholder makeup) to issue BSPCEs. Verify the individuals you plan to grant are eligible (employees, qualifying managers or board members).
• [ ] Shareholder Authorization: Get approval from shareholders to create a BSPCE pool (typically done in a General Meeting). This sets the maximum number of BSPCEs and broad terms. Remember you have 18 months after this authorization to issue the BSPCEs.
• [ ] Gather Data for Valuation: Collect your financials, business plan, cap table, and details of any recent funding round. Organize any market data or forecasts that support your company’s valuation.
• [ ] Obtain a Fair Market Value (FMV) Valuation: Use Equidam or a qualified valuation service to calculate the FMV of your ordinary shares. Make sure the valuation date is recent (ideally just before the grant date) and reflects all relevant factors (e.g. last round price, discounts for preferences/illiquidity).
• [ ] Review Valuation Report: Check the valuation outcome and methods. Ensure the strike price recommendation is not below the FMV. If anything is unclear, ask questions. It’s cheaper to fine-tune now than to face issues later.
• [ ] Document Everything: Save the full valuation report and any correspondence with the valuation provider. You may also ask the provider for a signed validation letter if possible. These documents will support your strike price in case of audit.
• [ ] Board Approval: Hold a Board meeting to approve the BSPCE grants. Document the strike price per share and reference the valuation as the basis for this price in the minutes. Have all board members sign the minutes.
• [ ] Issue Grant Letters/Agreements: Distribute BSPCE grant documents to each beneficiary, clearly stating the number of BSPCEs, the strike price (as determined by the valuation), vesting schedule, and expiration. Both company and employee should sign these.
• [ ] File Required Notices: Work with your lawyer to file any necessary forms. For example, French companies must file an annual report of BSPCE grants and exercises to the tax authorities, and report option exercises on employees’ tax forms. Ensure these filings align with your valuation (they often ask for details like strike price and FMV).
• [ ] Retain and Calendar: Keep copies of all BSPCE-related documents (shareholder resolution, board minutes, valuation report, grant letters, etc.) in a dedicated folder. Mark your calendar for 18 months out (or sooner if a new funding round is expected) to refresh the valuation for future grants. Keeping valuations up-to-date will maintain compliance for ongoing grants.
• [ ] Engage Advisors as Needed: If any complexity arises (e.g., cross-border issues, employee departures, company pivoting away from France, etc.), consult your legal/tax advisors promptly to adjust the plan or clarify tax implications.

Conclusion

BSPCEs have become a cornerstone of startup compensation in France – and for good reason. They empower startups to reward their teams with a piece of the company’s future growth, all while enjoying one of the most generous tax regimes around. To unlock this benefit, however, founders must navigate the valuation and compliance steps diligently. By understanding what BSPCEs are and how they compare to alternatives, you can choose the best tool for incentivizing your team. By adhering to the legal requirements for fair market value and documentation, you safeguard your plan’s tax-qualified status. And by leveraging modern solutions like Equidam’s founder-friendly valuation platform, through the collaboration with Futurz, you make the process faster and easier, tapping into expert knowledge without breaking the bank.

Both French startup founders and international founders with French subsidiaries can take advantage of BSPCEs to build loyal, motivated teams. The key is to approach the process proactively: get your valuation, work with your advisors, and keep everything above board. When done correctly, a BSPCE plan can supercharge your company’s talent retention and success, with team members literally invested in the outcome.

Equidam’s BSPCE valuation service is there to support you every step of the way – from calculating an accurate share value to delivering an audit-ready report. Combined with the guidance of your legal and tax advisors, you’ll be well-equipped to implement a compliant BSPCE plan that stands up to scrutiny and delivers real value to your employees. With your BSPCE valuation in hand and this how-to guide as a reference, you can confidently move forward in granting equity to your team, knowing that you’re doing it right. Here’s to your company’s growth and to sharing the journey with those who help build it!