The Equidam Podcast, Episode 19. Quintus Willemse, founder of Share Council, on setting up a first employee option plan in the Netherlands: how options are taxed, why valuation is where founders get stuck, what a plan really costs, and what AI changes about ownership.
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Bringing co-ownership to every employee
Daniel Faloppa: Welcome everyone to a new episode of the Equidam podcast, and the first one we record in person. Quintus is the founder of Share Council. We merged Equidam and Share Council a few months ago to bring co-ownership in a much easier way to every founder and employee of European private companies, starting from the Netherlands. Quintus has been running a cap table platform in the Netherlands for almost 10 years, so he has seen it all: stock options, equity compensation, every structure and all the taxation. It’s still a massive problem in Europe, how difficult this process is.
Quintus Willemse: It is. More than 10 years ago I was hoping it would become easier, quicker. I’m happy we’re now able to do that, partly with our platform.
Why valuation is a tax risk
Daniel: Can you frame the problem as it is today?
Quintus: One really big problem in employee participation is valuation. When a company sells shares to an employee, it has to be at market value. If it sells below market value, the delta is seen as income and taxed as salary.
But what’s the value of a company? Whatever someone wants to pay for it, you would argue, and the tax authorities argue the same. In the Netherlands they can still look back at a transaction years after it happened and say, “We think it should have been a different value. No tax was ever paid on that income, so we’re going to charge you those taxes, and fine you for not getting it right in time.”
Then there’s the sheer amount of regulation. What can you give an employee, what do they pay, what happens when they leave, when the company goes bankrupt, or when there’s a merger? Is that an exit or a transaction? From every angle there’s a tax angle, and the Dutch, French or German authorities all have an opinion. That makes it scary for companies.
Daniel: And you want it set up right beforehand, because you can’t change it afterwards.
Quintus: You can change a participation plan. What you can’t change is the action you executed years ago. If an employee bought a share for 10 and you realise years later the market value was 100, that’s a given. So you want those actions to be correct, and that’s a big part of where Share Council guides companies.
Quintus’s own co-ownership story
Daniel: Startups want the best engineers, and now larger companies in hospitality or construction compete for talent too. Participation lets employees share in the success while you hire them at a cost that isn’t prohibitive. The right moment is when you’re two or three founders hiring your first people, but at that stage it’s very expensive to set up.
Quintus: It’s not very expensive, but it’s expensive enough for a company that size. With Share Council we’ve found a series of interim steps a small company can take on the way to true co-ownership.
The best example is the software development company I have next to Share Council. In 2015 I wanted to make everybody a co-owner. We were two owners and three employees, and it was needlessly difficult and, for us, expensive. A notary, a foundation, advisors for the documentation, lawyers for the contracts, accountants for the calculations and bookkeeping. Altogether that becomes a really expensive package.
Daniel: And risky, because you might not find an advisor who has done it before for your type of company.
Quintus: Exactly. We built a small platform to manage the shares of our own little SME, and more and more companies asked if they could use it, and how it worked fiscally and financially. So we built a knowledge base: this is what you need to do, read this and you can do it yourself, and here’s a tool to manage it. That cut the cost of setting up employee participation tremendously, and let companies postpone the high costs to a moment when they can actually carry them.
Why employees need to share in the growth
Daniel: For the vast majority of companies at that stage, the solution is very similar. Bigger companies have different structures and history, but early on it should just be: this is the standard, implement it.
For me the goal has always been this. Without an equity package, the people who lived through a company’s growth phase don’t benefit from it, and they don’t get the chance to give that expertise back.
Quintus: They’re locked into that high-paying job.
Daniel: They have kids going to good universities and can’t afford to bring their expertise to a company that can only pay a startup salary. That’s an incredibly large limit on the growth of private companies in Europe.
Quintus: You posted about it on LinkedIn, the flywheel effect: employees grow along with the value of a company, have an exit, and then invest in or start a new startup. Robert Gaal set up Vliegwiel to keep talent in our economies and let it reinvest.
Daniel: In Europe we haven’t had an IPO that turns a large group of employees into millionaires, so employees don’t even think this way yet. There’s a lot of education to do, so people ask for these packages, especially when their contribution is critical.
Quintus: What we often hear from Dutch entrepreneurs is: “I want to share with my employees, but maybe only the super talented ones. And how do I know who they are?” If you pre-select who you think is talented, you get an unstable, unsafe group. You’re better off letting everybody participate in some way, to create a community within your company where real talent can flourish. We don’t see that happening in big numbers yet, but interest keeps growing.
Europe vs the US on employee equity
Daniel: It’s taking its time. From our research, a much smaller share of European private companies give equity to employees than in the US, and the US distributes many times more capital to employees of private companies every year than the whole of Europe.
Quintus: Unbelievable, for regions with comparable populations.
Vesting and reverse vesting
Daniel: In the US they use vesting schedules so equity only goes to people who stick around. Do you see that in the Netherlands, or does regulation make it harder?
Quintus: We see it more and more, especially with companies on platforms like Share Council, where they discover vesting and realise even a young employee straight out of school can get a package on day one. It’s fairly safe: if he leaves within a year, everything goes back to the company.
A lot of founders only realise this in our onboarding. They come in saying, “I have 20 employees, three top managers, and I want those three to co-own the company.” Then we say, “If you’re setting it up anyway, it’s also possible for the rest.” “But it’s too risky.” “Well, there are rules that make it very predictable for you.”
In the Netherlands you also see reverse vesting. All the shares someone might get go to them immediately, and if they leave before the end of the vesting period, they give them back for the same value, or less if the company lost value. The reason is regulation: the taxes are calculated at the moment of the transaction, not at the moment of an agreement or contract. In all honesty, I think that’s somewhat idiotic.
Daniel: Think of a young intern. There’s a video on YouTube of a Twitter intern who joined shortly before the IPO, got an equity package and cashed out a significant amount. Maybe it wasn’t even fully true, but those are the outcomes you want.
Quintus: You’re right that it’s not always completely true. The media regularly report that some US company is heading for an IPO and its employees are already millionaires. NVIDIA was the latest example. Yes and no. Many of those employees are still vesting and might never be able to cash out. On the other side of the pond it gets broadcast as a given, while in Europe the number is often deflated instead of inflated. The truth is somewhere in the middle.
Daniel: And if they leave, they face a short window to exercise, which is expensive, or they wait for an IPO that may never happen.
Quintus: I’m not saying Europe is doing better. We should have far more positive regulation around employee participation. Luckily the European Commission is pushing on this more than individual member states.
The new Dutch stock option rules
Daniel: The rules are changing here in the Netherlands too. How will the new option taxation work?
Quintus: For those listening: an option is the possibility to buy a share in the future at a price you agree today. As long as you hold it, nothing happens. Under Prime Minister Wim Kok, simply holding an option used to be taxed. He just needed extra money. They got rid of that.
Once you’re through your vesting, you can exercise: buy the shares at the old price. Say you buy at 10 and they’re now worth 100, so you gain 90 per share. The tax authorities see that 90 as income, like a bonus, through payroll. In the Netherlands the top rate on that is 49.5% (mkbservicedesk.nl), so about 45 euros. On 90 euros that’s fine. On 90,000 or 900,000 euros it’s a problem. Even 9,000 can be a problem for some people.
So the authorities said: you got shares, not cash, so we’ll wait. First they said they’d wait until the shares are tradable, which is a grey area. Share Council’s depositary receipts, which Dutch rules treat like shares, can be sold immediately, so they’re tradable, but if nobody wants to buy them they’re completely illiquid. Now they’re changing it to wait until you actually get cash.
The next step, which they hope to start on 1 January 2027, is that a company recognised as a start-up or scale-up under the definition RVO uses can apply for lower tax on exercised options, about 35% less on that gain. It’s a proposal, not law yet: under the plan 65% of the gain would be taxed and about 35% exempt (business.gov.nl). That should bring a lot of attention to this way of working. We’ve been working on a report for the government on how many companies use options now, how many would qualify, and how adoption could grow.
Daniel: Paying tax before you can cash in is impossible for most people, so the whole reward system goes unused. That’s why you get stock appreciation rights and profit sharing. But startups don’t have profits, and you want to share in the value you create, not the cash, because the cash may come 15 years from now, or never.
What changes when employees co-own
Daniel: Do you have stories of companies that made employees co-owners and saw a change?
Quintus: There’s a clear divide between companies with a full participation package and those with, to put it unkindly, a simpler one.
Daniel: An executive package.
Quintus: Yes. The companies that go all the way grow quicker, also in headcount, and more stably. Fewer of them leave our platform. When a company does leave, it has usually gone out of business or been sold, and often the new owner comes back later.
Or they go into a kind of stealth mode: not bankrupt, not sold, but without enough cash. That tends to happen where founders use the participation model to squeeze salaries. The ones that use it for its real value, as part of a compensation package open to everybody, are there for the long run. We’re almost 10 years old, so how much accurate data we have is debatable.
What I find even more interesting: companies that give everybody true ownership, not just a profit share, very quickly also raise capital from other investors, make their customers co-owners, and pay suppliers partly in ownership. They create an ecosystem. Those are the companies hitting it out of the park and riding through difficult times more easily.
Daniel: Because the workforce is committed and doesn’t just jump away.
Quintus: The workforce is committed, clients want to stick with you, suppliers help when you need it, and investors believe in you.
The Sharing Group: customers as co-owners
Daniel: Can you share a specific example?
Quintus: There’s a big one I always root for: The Sharing Group, founded by Henri de Jong, which is on our platform. It owns a set of companies: MyWheels, a car-sharing company; Mijndomein, a domain hosting service; EnergyZero, which works on connecting energy over the grid; and Bliq, which does home batteries. Across those companies they serve a very large number of customers.
Henri told me, “Quintus, I want a large part of my company to be owned by the community around it in the long run: the clients, the employees, the suppliers.” All their employees co-own the business, and everybody who uses their products builds up ownership.
Daniel: As a loyalty mechanism.
Quintus: Exactly. On top of the people who truly own shares, the group in the loyalty system, collecting points towards ownership, is even bigger. And they raise new capital regularly to finance their mobility, energy and tech businesses.
Daniel: It also changes incentives. If customers own part of a car-sharing company, they use those cars differently.
Quintus: One of the biggest problems for car sharing is cars getting wrecked.
Daniel: Or left dirty. That’s one of my theories: co-ownership changes the incentives, so we stop grabbing as much of a service as we can just because the subscription is unlimited. You see it with healthcare and many shared resources. If everybody co-owned them, behaviour would be different.
What employee equity costs
Daniel: Let’s talk about cost. If you build everything from scratch in the Netherlands, you end up with a large bill: notary, lawyers, accountants, tax advisers, plus working out how big the pool should be, how to replenish it, how to handle repeat grants. We’re trying to standardise that and bring it down.
So say we’re three founders and want to give equity to our first two Dutch engineers, future heads of engineering and design. What’s the cost and the process?
Quintus: Let me work backwards. The goal is to make an employee a true co-owner, someone who can trade their ownership and whom the tax authorities see as a true shareholder. If you’re seen as a true shareholder, your gains aren’t taxed as income, so you pay less. If not, everything is treated as salary and bonus.
In every economy I’ve seen, in Europe and the US, the best end state is true co-ownership through a share or a derivative of a share. Doing that properly means setting up a foundation and getting guidance, so engaging Share Council, the technology, the people and the onboarding. The more you want us to do, the more it costs, but it has come down a lot compared with doing everything from scratch.
Editor’s note: current Share Council prices are on the pricing page.
That’s the most expensive route. You set up a foundation (a STAK) that holds the shares and issues depositary receipts, which you can trade easily. You’ve been to the notary at least once, and later you may add options on those receipts.
For three founders and one first employee, we often say: hold off on the foundation, unless you know you’ll have 10 employees by the end of the year, or the founders want the share split and dilution properly set up. For one extra employee you want to avoid the notary and extra accountancy costs. You can either skip true co-ownership, with the downside that the employee pays more tax, or take a middle way like economic shares. Those can be traded without a notary, the employee becomes a real co-owner, and later you convert them into depositary receipts. The cost is a fraction of the full route. It’s almost odd that not everybody does this.
One step further back are stock appreciation rights, or options on depositary receipts. We mostly promote options on depositary receipts, because the employee can later become a true co-owner and pay less tax. Stock appreciation rights and virtual shares are, to put it unkindly, a bonus calculated in a nice way, with the highest tax on the gains.
Daniel: Always income tax.
Quintus: Always. So there’s a layered path to true co-ownership, and the costs follow those layers. Even at the top, I’d argue they’re not that high.
Daniel: Compared to a first employee’s salary, it’s fine. This should be the standard progression: start flexible with a few employees, and when you raise your Series A or plan to hire 10 or 50 people, switch to a foundation with depositary receipts. That’s very future-proof.
When advisors know the theory but not the practice
Daniel: Certificates can be traded without a notary, so at an exit you don’t need every holder’s signature. With other structures, if a shareholder has passed away or can’t vote, an M&A deal can stall for a year. It’s sad to think about, but your advisors should know about it.
Quintus: After all these years we see many advisors who know the theory but lack execution and market experience. Sometimes a plan comes by and I think: on paper it’s fantastic, in real life it’s a headache. Someone read it in a book.
Daniel: And it’s so hard to change.
Quintus: And “not working” can mean a lot of things. It’s too cumbersome, so the company never implements it. Or employees never feel the effect. If you spend a lot of money and nobody feels more part of the family, we’d argue that’s not working.
Daniel: And if taxes are maximised instead of minimised, that’s not great either. In the rare case when the company really grows, you don’t want to create problems for the people who shared in your success.
Quintus: There’s also a balance between financial benefits for employees and the decision power you give them. Lower taxes mean a higher return, absolutely. But we also advise every serious company to give employees an official way to be heard, a voice, not even a vote. Companies thrive with employee participation where those two are combined.
Daniel: That’s why it’s so hard. It cuts across finance, HR, tax, management and fundraising, and the advisors who can handle all of it are very few.
Quintus: Few and far between.
Valuation: where founders get stuck
Daniel: And the last piece of the puzzle is valuation.
Quintus: It might seem small, but it’s a huge piece. Like I said at the start, getting your valuation right is so important, and it’s a big hurdle that stops many companies from even starting.
Daniel: You want it reasonable and thought through. It tells you how big your pool should be and whether the incentive is meaningful. And you should have a recent valuation for every new grant. Is that what you tell companies?
Quintus: I first stumbled on Equidam in 2016, maybe even 2015, before Share Council was officially registered in 2017, because I was running into this myself. My employees were buying into the company every month with part of their salary, and they asked, “What’s the value, and how do we calculate it?”
So I called a registered valuator, who said, “Well, Quintus, it’s all fine and dandy, but I value companies at 100 million plus. A company your size, two founders and three employees? I have no idea what that’s worth. Nobody knows.” So I was stuck. And then I found Equidam. Suddenly I had the tools those registered valuators have, without going back to university.
I realised this step can completely paralyse an entrepreneur setting up employee participation. So fairly quickly we put a link to Equidam on our platform, because I knew people would get stuck at the valuation. And they did. Entrepreneurs came in happy, filled everything in, reached the valuation, and I’d say more than half of them never continued. It was a complete block.
Today, everywhere in our platform that touches valuation, you get to Equidam. Part of the block is the conversation with employees about what’s reasonable, but the biggest part is still the tax authorities wanting a solid valuation to show market value. Otherwise you need an expensive valuator, every year, and for smaller companies that’s just too expensive.
Daniel: Then it becomes a cost that makes no sense, and you start reconsidering the whole plan.
Quintus: And you fall back to profit sharing through normal payslips.
Daniel: In the US, the 409A standard helped tremendously. The tax authorities set a standard for what’s acceptable and when the burden of proof shifts to them instead of the company. The industry standardised how those valuations are done, and prices came down. It gives certainty to companies and employees. Now you can do a 409A valuation with us at an affordable price, every year.
Why Equidam and Share Council merged
Daniel: What gets you excited these days?
Quintus: When I first saw Equidam, I was like a kid in a toy store. I always thought we should do something together. For anyone listening: in the beginning we got nothing in return for that link. I just knew it was a really good service.
Only years later did we get in contact, talk about referrals, and eventually decide these companies belong together, so we merged them. Now the product is very strong at exactly this point: you want to share your company with others, or more narrowly with your employees to build dedication and engagement. All the problems you need to solve for that are covered by the one set of tools Equidam and Share Council now offer together. I have yet to see that anywhere else in the market at this level of quality.
Daniel: Same here. We have the potential to expand how many employees share in the growth of their companies, benefiting not just from their output per hour but from the difference they make.
New ownership models, up to AI
Quintus: How do you see the potential of the two companies together? I see it in employee participation, but also in participation in general.
Daniel: We don’t know yet what it can bring. There’s the famous story of the person who painted the Facebook offices, took shares as payment and became a millionaire. We saw experiments with NFTs and blockchain and new types of ownership. I don’t think blockchain is the way, because you need regulation. You can’t specify everything in a contract, so some things need to be settled case by case.
If you stretch your imagination, employees, customers, suppliers and investors can all participate. That takes you back to the idea of a company as a group of people that comes together to benefit an ecosystem, not a legal structure that just keeps absorbing more money. We haven’t seen the potential of that yet.
And now AI keeps advancing. Ownership is a much more powerful incentive than being a customer, supplier or employee. So can you give ownership to an AI agent?
Quintus: I was about to ask the same question. In theory, yes. In the Netherlands people have been asking for some time whether we can sell nature back to nature, whether nature can own itself. That’s a very intangible kind of ownership, and the same goes for AI. Can AI own a company, profit from it, pay taxes? If nature can own itself, then AI should be able to own companies too.
Daniel: Closer to today, people are heavily AI-augmented. If a one-person company gets nearly all its output from AI, is that company really an AI? And if it supplies customer support, wouldn’t its incentives be better aligned with some equity in its customers?
Quintus: Does AI have that emotion of being incentivised?
Daniel: Definitely. That’s what alignment is: aligning AI with values, moral values, safety. It’s all incentives.
A village where the forests were co-owned
Daniel: I like the nature example, because I’m from a small village in the mountains where nature used to be co-owned. The forests and the fields where you grazed your sheep were maintained by everybody. Everybody got a share of wood for the winter, and everybody had to shovel snow and maintain the roads.
We lost a lot of that by paying for services. Some things got better, but if I pay somebody a flat fee to clean the road, I have zero incentive to keep it clean. I think that’s a damaging model for many local services that should be co-owned, like a gas station or the post office. Everybody benefits from the post, and you wouldn’t abuse a postal service you co-own.
We’re just scratching the surface of this model. The first priority is getting equity to employees in Europe so companies can grow properly. But the sky’s the limit.
Quintus: If AI is the employee and gets equity, could one mega-AI end up employed everywhere, and co-own everything?
Daniel: That’s what some hope for with AGI. I hope we get lots of small AIs competing against each other, which seems to be nature’s way of regulating itself. But that’s a hope more than a scientific theory.
How AI changes work and ownership
Quintus: We both need to think about this seriously, because it affects our markets: valuation, co-ownership, legal structuring, tax advice. AI has already taken over a lot of developer work in a short time, and it goes further. At the big consultancy firms, people who aren’t on a client project are being asked to leave. Not long ago people thought AI needed human guidance to work. Some human intervention is still needed, but now it’s one person with 10 AIs instead of 10 people with 10 AIs.
My personal note: when I left the corporate world, I decided that for the rest of my working life I only wanted to set up social enterprises. Share Council is about closing the wealth gap in Europe, or at least limiting it, by making every SME employee in Europe a co-owner of the company they work for.
So I need to ask how AI affects that goal. Does it steer us away, because nobody has to work and we end up in some new regime where everybody is equal in abundance? I almost quoted Orwell: everybody’s equal, but some are more equal than others. I hope not. Or does AI give us more tools to make people co-owners and to educate them, which is what you’ve always said: teach everybody about valuation and what things are worth. Can AI make co-ownership more affordable and reachable, and get us to 100 million co-owners in Europe, spreading capital more equally?
Paid for hours or paid for output
Daniel: Thomas Piketty would be proud of us if we could. What you said made me think about being rewarded for output. If you’re paid by the hour, you miss out with all this AI, because your output grows but your hours don’t. If the company does well, the owners capture that increase.
We want people who use AI tools brilliantly working in companies, not going solo because that’s the only way to get equity. We don’t want them to be freelancers with 10 clients who spend half their time on sales.
Quintus: Which nobody likes.
Daniel: Together they achieve larger outcomes. Nobody builds a space shuttle alone. So we need to reward people on output, not only hours, if we want to employ AI-native talent in Europe or anywhere.
Quintus: Do you think companies will shift to truly valuing employees on output, and that we’ll be one of the parties offering the tools?
Daniel: Equity rewards people on the output of the whole company, and on how well that output meets a market need. It doesn’t get more connected to the value created than that.
Lower costs, more owners
Quintus: But how do you get that equity to them?
Daniel: The barriers have to come down tremendously, and I don’t think people realise what happens when they do. Robinhood is just an investment platform, but it replaced a commission on every trade with zero. With a commission you need to invest a fairly large amount to make a return. Without one, you can invest a couple of euros, and Robinhood became one of the big US platforms for retail investors. Think of how many people who had never invested put small amounts into Bitcoin. Or Instagram, which removed the friction of uploading pictures, and adoption took off.
If we bring employee participation down to manageable costs, which the right structure already allows but few people know about, the impact could be extremely large. I don’t think we know how far it can go.
On that inspiring note, we conclude this episode. There’s so much more to talk about. Thanks so much, Quintus.
Quintus: Thank you for the conversation, I appreciate it.
Setting up your first option plan? You can value your company with Equidam and set up the plan with Share Council. All episodes of The Equidam Podcast.