Policy wheels are turning slowly, but they are turning.
Last year at Slush, 30 CEOs and founders of some of the most well-known European companies including BlaBlaCar, Klarna, Revolut, Supercell and TransferWise signed a letter calling on legislators 'to fix the patchy, inconsistent and often punitive rules that govern employee ownership — the practice of giving staff options to acquire a slice of the company they're working for.'
They argued that stock options is one of the main levers startups have to recruit the talent they need. They wrote: 'If we don’t eliminate the talent bottleneck, we risk squandering the incredible momentum that European tech has built up in recent years. The next Google, Amazon or Netflix could well come from Europe, but for that to happen, reforming the rules of employee ownership is definitely not optional.'
Within weeks, 500 more CEOs and founders added their signature to the letter, which kicked off #NotOptional, a campaign to bring about change in how stock options are governed across Europe.
A year on, the European Commission has actively engaged with the campaign and is looking for ways to tackle the issue in the upcoming 5-year term. Startup associations across Europe, from Deutsche Startups to France Digitale and Scale Ireland have held meetings at the most senior levels and secured commitments to make rewarding startup talent a priority. At the World Economic Forum in Davos, ineffective employee ownership policies were singled out as a major bottleneck to the growth of Digital Europe.
A change is afoot in Europe. Finland is currently in the process of drafting its new policy, France has made changes to its scheme for startups and we expect to see more, Ireland just broadened the scope of its employee ownership scheme and has a full-scale review planned for next year, and Germany, one of the countries with the worst policy in Europe, is finally responding to entrepreneurs who've been lobbying for change for years.
Based on our experience working with entrepreneurs around the world, we strongly believe that fixing stock option policies will have material impact on the ability of startups to grow and create tech giants on par with those emerging from the US and China.
Everyone who joined us in signing #NotOptional can be proud that they've helped to put the issue on the agenda in Europe. Now we need to turn positive conversations across the continent into policy.
The State Of European Tech Survey