The last time we raised money (6 million euros), we made an important decision with our investors: we wanted to involve all employees in OpenClassrooms capital.
As an employee, you will receive stock options. Technically, you will receive BSCPE (short for "Bons de Souscription de Parts de Créateur d'Entreprise"), which is one of several possible mechanisms in France, tailored to innovative young companies.
It was an important decision for us. We want you to take some time to learn how it works and what it means.
Short version: your stock options might earn you money in the future. Whatever happens, it’s good news and you have nothing to lose, but it’s essential to understand how it works to get the most out of it. It’s quite complex and surprising when you’re not used to how shares work.
You are a shareholder too!
A company can have one or many shareholders. It’s usually divided into many shares.
If you have 100 shares in a company that's cut in 1000 shares, you’ll have 10% of that company.
A company such as OpenClassrooms has several shareholders:
Xavier Niel (NJJ Capital)
… and now, everyone in the company can also have shares!
How much are they worth?
We have decided to open 500 000€ (half a million euros') worth of shares to OpenClassrooms employees.
Most of the shares will be distributed equally among all current and future OpenClassrooms employees as BSCPE (it’ll work for the first 100 employees, after that we’ll have to create something new).
The remaining shares will be distributed once a year to outstanding employees at OpenClassrooms.
To keep it simple, we'll assume here that you just received 400 shares at 10€ each. This is not the actual value, but this is close to reality and simple enough to do some calculations.
Now, let's see why it doesn't mean that you just won 4000€!
What is a BSCPE?
A BSCPE (short for Bon de Souscription de Parts de Créateur d'Entreprise) is like receiving a little piece of paper that says "Congratulations, you’ve got the right to buy some company shares at this fixed price."
Let's say the price at the time of receiving it is 10€ / share. Technically, you’ll be able to transform your bonds into shares by buying them at 10€ for each one if you want to… but few people usually do it, because it means spending money (if you have 400 shares, you have to spend 4000€ for instance).
However, it becomes more interesting later when some events occur (more on that later on) and the company is worth more than 10€ per share. For instance, if it’s worth 50€ per share at the time you decide to use them, you’ll be able to transform your bonds into shares (without spending money), and you’ll get the difference. You’ll get (50 - 10) x 400 (number of bonds), which is 16 000€ in this example.
How to use them?
You have 2 options:
You can transform your bonds into shares at any time, by buying them at a competitive price. Once that’s done, you’ll be a shareholder of the company for good!
You can also wait for an exit event, which happens if the company goes public, is sold or raises money again. You will then be able to transform your bonds in shares without spending money, and earn the increased value.
There are several conditions:
A 1-year cliff period: your stock options can only be used after a year. This is pretty standard in many companies. It helps to avoid the extreme case of a person that works 2 days total in order to get some shares and then leaves. Not that we expect this to happen of course. ;-)
A 4-year vesting period: every year during 4 years, you’ll have the right to subscribe part of your BSPCE (subscribe is legalese for actually getting the shares). This is an incentive to keep people long-term. In 2 years, you’ll have access to 50% of the shares, and in 4 years, 100% of them.
In case of exit, things accelerate: if the company is sold before the end of your vesting period, you’ll be able to subscribe 100% of your shares immediately anyway, even if you’ve had BSPCE for less than 4 years. This is good news for you!
So, let me get this straight: I won 4000€ today, is that right?
No. You’ve got the right to buy shares at a fixed value, which is 10€ per share, which are worth 4000€ (400 shares at 10€ per share).
If conditions are met, you’ll be able to use them to receive shares and sell these shares at the same time at our next fundraising, if we go public, or if we sell the company. You’ll get the difference between 10€ per share and the current share value at the time you want to sell them.
If everything goes well, your shares should be worth much more (x2, x3, x10, x20? everything is possible! 🦄 ). They could also be worth less: worst case scenario, you’ll do nothing with them, but you won’t lose money either if you don’t subscribe.
Let’s talk money: how much can I earn?
It depends on the company value when you’ll sell your shares. This little table should help you understand the scenarios better:
If OpenClassrooms is worth...
I’ll earn (rounded value)...
2 times more than the last fundraising...
Usually, investors want to see a 4x or 5x value difference, but they can make less (hey, even 0x!) and more (20x, 30x, and sometimes more in some rare cases).
Please note that:
This table is based on the actual total number of shares given in our example. If we raise more funds, things will change. New shares will be created, and everyone will get diluted (meaning there's a decrease in current shareholders’ company ownership) so we can have new investors. You’ll end up with a lower percentage of the company… which is worth more!
You’ll have to pay taxes on your profits.
Who is it for?
All full-time employees (“CDI”) get stock options!
Other employees (“CDD”, internships) will get stock options as soon as they become full time “CDI” employees. Good news: the time you spent before your CDI won’t be lost because we’ll take it into account when calculating your vesting period!
Why are you doing this?
It’s something we’ve had in mind for a while. It’s a bit complex to do, which is why we used our latest fundraising to make it happen and to negotiate it with new investors.
There wasn’t a lot of debate, as everyone agreed it was a good idea.
Why? Because it aligns a bit more employees with its founders and investors. It's a way to share the value we create together everyday.
On the plus side, it can be a nice bonus for long term employees. It’s also a way to attract new ones. We give some of our shares, but we think it’ll be better long-term.
Does this mean OpenClassrooms will be sold?
That’s a possibility but not a certainty or obligation. As soon as an investor joins a company, they will look for a way to sell their shares a few years later.
This can happen when:
A new investor joins the company in future fundraising: they will sell their shares to this new investor.
The company goes public. Everyone can buy some of the shares.
The company is sold to another company.
It’s not easy to say what’s going to happen because it depends on a lot of things. We have no plans to sell the company at this time and have already refused some offers in the past. We have a lot of criteria to take into account, like how much the company would be worth of course, but also what the buy would plan to do with it.
Any questions? Ask Benjamin Sellam (our CFO) or Sonia Hadjadj (our head of legal)!