⦿ INSIGHTS

Our investment in Salto X: the platform enabling token incentive plans for remote companies

“The main bottleneck for European startup growth is not the lack of capital, it’s the lack of talent!” This sentence has been said by many and I’m now stating it again because it’s sadly the truth. If we are serious about wanting Europe’s tech scene to thrive (and one day be on par - or better - than the US) then we need to drastically improve our ability to attract and retain talent.
Our investment in Salto X: the platform enabling token incentive plans for remote companies
WRITTEN BY
Sara Rywe
Partner
WRITTEN BY

Why are we struggling with talent in Europe?

The answer to this question entails a lot of aspects, however, there’s one main issue that needs to be solved: enabling financial incentives such as stock options across geographical borders.

In 2018, thirty European tech CEOs wrote a letter to policymakers about the urgency of improving the policies around stock options in Europe. This group included some of the most brilliant minds in the tech world including many Nordic and Baltic founders such as Markus Villig (Bolt), Jacob de Geer (Zettle), Taavet Hinrikus (Wise), Johannes Schildt (Kry/Livi), Ilkka Paananen (Supercell) and our very own byFounders Collective member Peter Mühlmann (Trustpilot). These CEOs are different in many ways, but they all united around the pressing need of fixing the “patchy, inconsistent and often punitive rules that govern employee ownership”. 

With no common EU standard and each country having its own norms, legal framework, and tax code, it’s almost impossible to properly reward and incentivize employees, advisors, and other contributors. And sadly, it seems like we’re no way close to having this major issue solved. 

An innovative and remote-friendly alternative to ESOP

This is why we are so excited about backing the all-star team of Salto X on their mission of creating a remote-friendly alternative to stock options in Europe. With web3 entering a new era over the past year and with more actors becoming familiar with blockchain-based applications and instruments, the timing is right for Salto X to leverage tokens and bring them to more traditional web2 companies. The team is hence building a platform that gives transparent access to equity compensation to contributors such as employees, regardless of geography. 

There’s definitely a lot to explore in that space, and multiple aspects to it, but by using various blockchain-based instruments like utility tokens and NFT certificates, powered by smart contracts, the Salto X platform makes it possible for companies to give out tokens to their employees and other contributors that can be cashed out in case of a liquidity event, such as an IPO, or by selling it to other parties after vesting. By circumventing traditional equity plans, they also circumvent traditional equity policies. Will this be an easy task? No. Will the team have to work really hard to make this a reality? Yes.

Salto X - the right team for the job

If there’s any team who can do it, we believe it’s Elise, Krists, Tanya, Ragnar, and their amazing extended team. With Ragnar’s unique insights from building Pipedrive and angel investing in 30+ tech startups, Krists impeccable product-first mindset, Elise’s experience of the intersection between law and tech, and Tanya’s powerful operational go-to attitude, we are confident that this team can bring a new era of financial incentives to life. 

At byFounders, we are set out to invest in visionary founders who are ready to truly transform processes and industries the way we know them today. We are therefore very proud to lead the €5,2 Mio seed round in Salto X and partner up with the blockchain focused VC fund Blockwall, New York-based Box Group, crypto fintech 3Commas, and angels such as Liu Jiang (ex-Sequoia GP) &  Alex Gluchkowski (Founder of ZkSync).  

Giving employees and other contributors tokens - similar to a stock option program - is so much more than just a benefit on top of a salary, it’s a sign of appreciation to people who are taking risk and investing time into yet unproven businesses. We therefore want to finish this blogpost off with a shoutout to all of you contributors and early risk takers out there: You are invaluable and we will - together with Salto X - fight to ensure that you get the stake you deserve in the future success of the companies you help build!

More about the author(s)
Sara Rywe
Partner

Sara oversees our investments in Scandinavia - focusing primarily on Sweden, Norway, and Denmark - and has a particular interest in the future of work and FinTech. Her strong interest in social impact (and diversity!) is something that she continues to focus on here at byFounders and she is the mastermind behind our ‘impact-aware’ strategy.

More about the author(s)
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