Employee participation plans are losing massive value – these are the alternatives startups can offer their employees

Just a few years ago, startups were able to convince top talent to forgo consultant salaries and work the same hours for significantly less money. The arguments: flat hierarchies, exciting tasks – and, above all, the opportunity to share in the billion-dollar exit later on thanks to employee share ownership . But for many startups, "later on the billion-dollar exit " is a distant prospect or has become completely unrealistic.

Since the 2022 market correction, many startups have lost significant value . This has also led to a decline in the value of employee shares. At the Berlin-based fintech Solaris, shares were reportedly worth around €7,000 at their peak. After the company was in financial distress for an extended period and only survived through bailout financing, the shares fell to just 10 cents per share, according to Manager Magazin .

A similar picture unfolded at the Berlin-based technology rental portal Grover : Celebrated as a unicorn at the beginning of 2022, the startup was forced to lay off employees shortly thereafter. The founder resigned, the company became a restructuring case, and little of its unicorn valuation remained. The Swedish payment provider Klarna also lost massive value in a short period of time : from $45 billion to under $7 billion in just 18 months.