Founder's Story - Tech Employees Are Being Robbed Of Billions | Ep. 417 with Oren Barzilai CEO & Founder of Equitybee

Episode Date: July 9, 2026

Daniel and Oren Barzilai, Co-founder and CEO of Equitybee, dive into a problem hiding inside the startup economy: employees can spend years helping build valuable companies, receive stock options as part of their compensation, and still walk away with nothing because they cannot afford to exercise those options. Oren explains how his experience building Tapingo and watching employees miss out after its acquisition by Grubhub planted the seed for Equitybee. The conversation covers how startup equity actually works, why companies staying private longer has made the problem worse, how employees should evaluate equity offers, and why private market access may be creating an entirely new class of wealth. Key Discussion Points Oren explains that the true amount of startup employee equity going unexercised is difficult to measure, but estimates can range from tens of billions to potentially much more each year. He argues that being a founder is not necessarily the highest-probability path to getting rich and that joining the right startup at the right time can create a life-changing financial outcome. Oren shares that he was getting paid to code at thirteen during the dot-com era and remembers the fulfillment of creating something that other people actually used and valued. He explains how the acquisition of Tapingo by Grubhub exposed the painful equity problem firsthand: former employees who should have received hundreds of thousands of dollars had lost their options because they could not afford to exercise them. Oren shares how the original idea for Equitybee sat in his notes for years until he met an employee who needed roughly $200,000 to exercise stock options before leaving a company. After helping that employee connect with investors, referrals quickly followed, proving there was a much larger need for a platform connecting employees with exercise funding. Oren explains why the problem has become more severe as startups stay private for longer, creating more value before an IPO while employees change jobs more frequently. He breaks down the first things every startup employee should understand: stock options are not shares, the strike price matters, taxes matter, and employees may need to exercise before a liquidity event to preserve their equity. Oren shares the story of a Wiz employee who needed around $170,000 to exercise options. Equitybee helped provide the funding, and after Wiz's acquisition the employee reportedly netted approximately $5.2 million after investors were repaid. He also tells the story of an immigrant developer who had no spare capital, received funding to exercise his options, later netted over $3 million, and used part of the money to start a nonprofit providing dental care to children in India. Takeaways Startup employees should evaluate equity offers with the same seriousness they use to compare salaries, benefits, and job titles. Stock options are only a right to buy shares; if employees cannot afford the exercise price and associated taxes, they can lose the value entirely. Companies staying private longer has created enormous wealth on paper, but employees need infrastructure and education to convert that paper value into actual ownership. The most attractive private market investments may not always be the companies everyone is already talking about, because popular names can become expensive before investors gain access. Life-changing wealth does not always lead people to stop working. Oren believes builders often return to entrepreneurship, investing, advising, and mission-driven work because their motivation goes beyond money. Closing Thoughts Oren Barzilai’s story reveals a part of startup compensation that many employees do not understand until it is too late. Equity is often sold as the promise of participating in a company’s success, but without the capital, education, and infrastructure to exercise stock options, that promise can disappear. This episode is a reminder that the people helping build tomorrow’s billion-dollar companies need to understand exactly what they own—and what they must do to keep it. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

I've heard that over $30 billion in stock, or the stock options, goes unexercised every year. It can be anywhere between $30 billion, even $100 billion a year from U.S. employees' pocket. An employee left a company that back then called WIS, that employee needed almost $170,000. He could not afford to exercise, and only four years later, Google completed acquisition of WIS for $32 billion. Orrin Barsolai sold his last company. for $150 million. Now his company, EquityP, has funded over 317 million in stock options. This conversation might change your network.

That employee did not have a direct despair. He approached Equity B. About a year later, that employee. Something that's been crazy weighing on my mind recently is the fact that there's so many tech companies that are creating millionaires. These are employees. These are not even the founders, co-founders. They're not even C-suite.

I know someone that just made $10 million off of the SpaceX IPO, and they've only been there for just a couple of years, which is insane. I've heard that over $30 billion in stock or the stock options goes unexercised at these types of companies every year. It's a very opaque market. Nobody knows a true number. It can be anywhere between $30 billion a year. to 60 or even 100 billion dollars a year from U.S. employees' pockets.

Okay? This is a painful amount of capital that employees worked, tech employees, startup employees worked hard to earn and invest, and they are losing because the way that the system is structured. I think it's unfair. It's unjust. and this is something that, especially these days when companies are staying private longer, create significant value while they're still private. This is something that we must fix.

I was telling someone recently that they shouldn't even be a founder, that they should go work for one of these tech companies because there's the obvious risk in both ends, but at least the tech company has some sort of funding, they could get these options. What do you think about right now in terms of entrepreneurship? Should someone even go and try and be a founder with all the risk and competition? Or maybe just go work at a startup who's already got some steam and at least take advantage of some equity?

I think that first, being a founder is not only about income or cash or capital. So if this is your main incentive, I want to get rich. Yes, being a founder probably is not the best probable way to do that. Now, more important, I think that owning equity at the right company can lead to life-changing event, a financial life-changing event that will impact you, your family, your children, and potentially your grandchildren. So, selecting the right company and joining the right company at the right time is critical. and at the same time understanding the equity that you are being granted is more critical than ever these days.

So let's go back in your life at 13 years old. You were getting paid to code, which by the way, I was coding but not getting paid. I've never gotten paid to code, sadly, which is why I dropped out of computer science school. But you were getting paid to code at 13 years old. Let's go back to that moment. What did you think your life was going to be then? I didn't. I grew up during the dot-com bubble. I love coding. I loved computers. And I started building stuff by my own because I love doing that. And back then, they just searched for coders and they hired anyone.

So I found myself at 13 years of age getting paid for code. and I vividly remember the feeling of the actual you're creating value and then somebody else is actually leveraging this value and benefiting and enjoying that value. That kind of feeling is something that you can't forget. It's very fulfilling the amount of freedom and confidence as you provide you. It is amazing and this is something that I'm trying to instill my kids these days or how to create value and the gratitude. then how we put it is, yes, I put it at it is for you. Do you find that kids now, are they still motivated by money? Are they motivated by the same things you were?

Or is this something totally different? I wouldn't say that I was motivated by money. I was motivated by building. And I think this is very different. I think different kids, different humans, right? So different environments and different needs. I think that especially when you are young and curious and your brain is very elastic, we as parents should push our kids, our children, to use that opportunity to find something

that they're passionate about, something they love, to dig real deep and enjoy doing that, especially while they are children. I think highly motivated by passion, or like maybe you have a lot of people. and I were motivated by totally different things. I had to work in order to get by. So that motivated me. I wanted to. Same here. Yeah. Same here. We wanted to eat the next day. So we had to work. We're kids now many times obviously have things different. Let's go to the grub of acquisition. A lot of people that have been on this show, their company gets acquired and then they're lost. Mentally, they're worse off after the acquisition than before. How was that process for you?

and how did you feel after? So we built the Pingo for many years. It was a very, very long journey. And during that journey, you know, I started the company. I was sure that we are going to be the next Google or the next Microsoft back then. And I remember hiring my first employees, offering them equity or stock options with the clear understanding that we will be successful together. and you're going to get your piece of the pie. And then I felt like I'm giving them a piece of my flash,

and they felt like it's a lottery ticket. So the contrast was very obvious and painful and painful for me as an entrepreneur. And then the company grew bigger and became more significant. And many of my first early employees and then later employees became paper rich. But this is still paper rich, not real wealth yet, but a real potential of wealth. and I was very surprised that they don't understand that and that they cannot monetize that. At the same time that VCs and investors paid in investing the company

tens of millions of dollars, employees that joined three or four years ago and had a strike price that is maybe 10% or less than the actual value of the share price today, could not monetize that. And it became even more painful. when some of those employees left the company, which is okay, it's a natural process,

and they could not afford to exercise the stock options, and they lost everything. And then it gets me to the actual acquisition, because after the acquisition, we had this event, and we invited team members from all times to this event to celebrate the acquisition, and I could clearly see,

hey, that guy should have got like half a million dollars. She should have got $700,000. dollars. These are life-changing amounts for individual employees that can now buy a home without paying a mortgage in cash or anything else. And I clearly remember the feeling that this is not fair. Somebody should help them. Somebody should fix the system to make sure that those employees that built a company that we could not do it without them, okay, should get their piece of the pie, should get what they've earned. And that was one of the leading motivations that that planted the seed of Equity B in my brain.

So when you started Equity B, I see the problem that you were solving based on your firsthand experience, which I think makes a great entrepreneur is when you really live something and you're like, oh my gosh, this is a problem, I'm going to solve this problem. But we don't always know how big the problem is.

When did you realize that this was massive beyond just the experiences you had? So first, it was the seed in my head. and I like building, and one of my challenges that I defocus a lot. So in order to defocus, every time that I have something that I'm excited about, I just write it down, I put it in a folder,

and then I feel like I did something, and then I can move on and not spend more time on that. So the concept of Equipa was in my head, I think since 2013 or 14, very early on. And then I kept thinking about it. And at this random event, at a tech event, I met a friend of a friend of a friend. And he was like, yeah, I'm about to leave that company. I need like $200,000 to examine my stock options or I'm going to lose everything.

I don't know what to do. I work too hard for this. I could really feel like the pain struggle. And I understood that because I spent a lot of time thinking about it. So I told them, you know what? I will help you. I was, you know, ex-institant entrepreneur by that already very connected. I knew investors.

I knew the system. So I decided to come up with a solution to help him. I did that. And then he called me. It was so grateful. And I really remembered that feeling that gratitude, how fulfilling it was. Then he brought another friend. And that friend brought another to other friends that needed help.

And I connected them with investors. we funded them. We made sure that they will own their piece of the equity and they would be able to pay back. The investors who supported them for a little liquidity event and everybody will benefit. And it was very clear to me that it's actually very fulfilling

and that we are creating a very positive impact on the world by actually spreading this wealth. Then, only then I realized when I started looking into numbers and Carter started publishing reports, okay? And that number varies, but between 50, it varies in the years, it goes ups and down based on the market sentiment. But between 55 to 70% of in-the-money stock options goes unexercise every year in the U.S. This is a painful amount. And when you added to the fact that there are about 6 million startup employees in the U.S. alone,

you understand that this is a huge, huge opportunity. and by spreading the world between those potential 6 million tech employees, you can create a very, very positive change in the world. And this is something that we are very, very proud of. And since our inception, we've seen many stories of how we've created this impact. And this is something that we are very, very proud of. Wow, I mean, that's amazing. I didn't realize how big the problem was.

I just know a lot of people that have worked at startups. I worked as startups. I never exercised anything. Looking back, I wish I knew you 10 years ago. We didn't exist back then. You obviously solved this massive problem. Why do you think this problem hadn't really been solved already? I think that the main reason is that at the past, maybe 20 years ago, companies on average used to spend about four years from inception to an IPO. So two factors that employees, even employees spend about three and a half years or three years in a company, they have a very good chance to see it through. This is one thing.

The second thing is that the value, the cost of external stock options, because the value that is created while the company is still private was a way significantly lower. Today, you know, I think SpaceX was found in 2002 or 2003. It's more than 20 years of being a private company, only now went public. Company is staying private significantly longer,

more than 12 years. or in this basis example, more than 20 years, and generate most of the appreciation in value while the company is still private. And we don't really expect employees to stay in the same company for 20 years, not even 10 years, right? So those two paradigm shifts I think push this problem to become significantly more painful

and the market to become significantly bigger And with the current momentum, which companies will keep staying private longer, we will need to see this solution and other solutions actually growing in the private market to provide liquidity and other solutions for these tech employees. Yeah, I've heard some stats that people are leaving like one, two, three years. Like, they're not even staying long at all. It's just a totally different mindset compared to before, like stay at one company, retire at that company. after 40 years, right? Now people are like, get it, get to the next one, get to the next one.

What would you say is something or two things that every employee needs to know about exercising their equity? I would say first that before exercising, joining the right company in the right time can lead to a life-changing event. So please do your homework. Understand which companies you're joining,

which company you're joining to, what is the potential value of that company, why there's the chances to be successful, like the magnitude of the company, the size of the company, the stage of the company, you should do your homework. Then, once you decided that you want to join a certain company, you were offered to join that company,

you need to understand the value of the stock option that you're being offered. Like you compare salaries, you need to compare the equity grant. Okay? Once you're part of a company and you're doing great in that company, the company is growing in value,

you need to understand that owning stock co-options is not a share. You own a right to buy a share at a company at a certain price. But in order to own that share, if you will not be there after a liquidity event, you need to actually pay that price and the taxes that are connected to that. Now, there are many technical stuff that they can do. You can exercise early to become more tax-efficient. You can exercise early while I'm still in the company in order to get some early liquidity and lock the share price.

But the first thing is to become aware of that, to understand what company, like what equity B and other solutions can offer you and to make sure that you are making an educated decision. Compare the offers that you get from which companies to join, the value of that equity, and to make sure that you are aware on how to retain and leverage that equity to make. maximize your compensation. Is there an employee post-starting Equity B?

Because I know you shared some examples pre. Was there an employee that a story or somebody that reached out to you or you got wind of that they worked with Equity B or leveraged Equity B and it was life-changing? There are many. There are many employees that use Equity B and experience life-changing events. I think that, but I don't think it's about Mr. about the money. It's more about we are a mission-driven company and the positive change that we are making in the world. So I'll give you two examples. Okay. The first example, I think, was 2002. At 2022, the market crashed. Okay. At the end of 2022, the market crashed. There was no liquidity,

no funding grounds. And an employee left a company that back then called WIS that wasn't as well known as it is now. Okay. That employee needed almost one, $17,000. He did not, he could not afford to exercise. He approached Equity B. We funded them at a time of like a funding winter. Okay. And only four years later, Google completed the acquisition of Wyss for $32 billion. Okay. After paying back the investors that did it very well as well, that implominated $5.2 million out of that exit. Okay. This is a This is a life-changing event, okay? And this is something that we are very, very proud of.

But maybe I can tell you another story. This is actually something that I'm very, very proud of because this is an individual that was an immigrant to the US. It was a developer in a quantum computing company. He needed about $300,000. This is like shortly after we launched the US back in 2020, he needed $300,000 and he didn't have a dime to spare. Okay. You know, sometimes employees tell us, I need like $150,000, I will pay $10,000 up my own pocket and you'll give you $140. Okay? That employee did not have a

time to spare. And we funded that employee. About a year later, the company went public, okay? And that employee needed just over $3 million. But the story does not end there. That employee that did not have a dime to spare area before, just ended $3 million. And that employee used a portion of that money to create a non-profit in India, to provide dental care for kids. Okay? So those kind of stories of that something that we've started, as, you know, it sparked, I started from a simple idea in my head many years ago,

to a full cycle company that provides the quality to take employees that thanks to their hard work in our solution now experiencing life-changing events and they're using that capital to make the world a better place, this is something that I can't put towards how proud we are and the kind of energy provides us to push us to go forward and keep grinding to support more employees that we that many of them will experience such events and will be able to move it forward. I think we share that in our missions, your mission and then my mission, when you help somebody and that amplifies to many other things, that's really how you can impact millions or billions of people around the world is leveraging that amplification. That's what you guys are doing.

I mean, 5.2 million, three million. These are huge numbers. Like you said, they could retire, which leads me into something I've really been stewing on. I've really, really been thinking about this because I wonder how this is going to change all jobs, all companies. When somebody gets something like that, somebody gets a windfall, and some of these people might be in their 20s, even early 30s. Let's say you're 28 years old and you get $5.2 million. How is this going to change the dynamic of employees?

You know, this is a very philosophical question. Philosophical question. Yeah, we can go deep. I would say that those two individuals from that examples were a bit older. Okay. But I think it's fair. I think that once you manage to earn sufficient amount of money and you have the privilege to keep working,

but only from things that you're passionate about, I believe it is actually better because if you're doing something that you're passionate about, you're actually going to do it better. You're going to become an expert because you love what we're doing. You'll keep thinking about it. You'll keep perfectus. So I don't know too many people that retired early. I know many people that managed to get significant amount of capital where they're still young.

they took a few months off and very fast came back to the arena. I think that people that are building, it's not only about the money. It's about winning. It's about creating value. And you have this feedback loop about fulfillment and success and positive impact that you're creating. So I don't know too many people that retired early, but I do know many people that are now significant pillars in the world. the industry because they are investing in new companies, they are advising entrepreneurs,

they are building new companies, they became executives in other significant companies. And that's what I'm seeing. People are back in the arena. People are back building, especially today when things move much faster with AI. It's more exciting than ever. Wow. Yeah, a lot of people are going to be living the mission-driven life. For some reason, I can't help but think of the book, The Sapiens. Next time, you and I will have to go 30 minutes. We're going to go really deep down the rabbit hole. Let's do it.

Let's do it up. Because we don't even have enough time for me to tell you about the things I've been thinking around this, who will even be employees. But it sounds, though, that this could open up a totally new class of investors because they didn't come from the investing world. They were able to create wealth. How do you balance, though, the investor side and the employee side? So we are a very mission-driven company. we are very focused on providing the employees with the capital they need to become shareholders and participate in the success of the company they have built.

In order to provide them the capital, we need investors to support them. The investors are our partners, okay? And we need to make sure that they will be able to access great companies at attractive terms to make sure that we will be able to generate returns and put it back to work with more employees. So this is the way that we think about it to balance that. But the core mission, the focus is very clear. We need to support as many employees as we can to enable them to participate in the success of the company they helped build.

They worked hard for many years. They were promised a piece of the pie. And our mission is to make sure that you're going to own their piece of the pie. I love pie. What's your favorite pie, by the way? To be honest, I'm not a very, I don't have a sweet tooth. Okay, I am in the U.S. so I can say pizza. Okay, pizza-fi.

I like, okay, you know what? I just had pizza in France. I think it was better than the pizza had in Italy. I don't know why. Something about it. I'm not sure. I think that's like an illegal statement in some countries. Don't tell people in Italy.

When I was in Greece, they all told me that they had the best olive oil. They're like, Italy does not have good olive oil. We do. And I'm like, okay. They also said they have the best baklava and, you know, Turkey says they have the best. Food is complicated. It's a complicated subject. So I'm curious, what is some of the excitement right now?

Like what companies that you're finding employees are wanting to exercise or are just, everyone's just talking about? So I would say that employees from all companies want to exercise all the time. Okay. So employees from all companies, even if it's SpaceX or on Trump. or Open AI, or companies that you never heard of, okay, employees need a capital to participate in the success of the company I built. From the demand side, from the investor side,

at any given time, there are usually four or five companies that all investors are looking for. It used to be SpaceX. Today, you can think of about, obviously, Anthropic, Open AI, Unreal, NeuroLink. but the secret is that those companies that everybody wants right now usually very expensive supply and demand right and historically the best returners the best returns for investors

were generated from the from the companies that are not well-known or before they become well-known before they become significantly expensive And obviously it's very hard to know which companies today will become the next entropic opening as of tomorrow. So we actually offer our institutional investors and family offices we work with sophisticated investment instruments that enables them to diversify across many companies and actually manage to also by doing that find those winners of tomorrow before they are aware of them specifically. if we all go into the past, you know, if we had the crystal ball, I would be a crypto billionaire, probably.

But it is a type of a crystal ball because when you provide employees with funding for their stock options, you actually paying the price of the company when the employee joined a company three or four years ago. So in a sense, it's very similar to investing with a crystal ball because you pay today the price that was correct for three or four years ago. Okay. And that is creating a very interesting opportunity both for investors and to the employees that should exercise the stock options. Because if I have a stock option to buy Google at the current price, at the current market price, I would argue that it's not very valuable because I can just buy the share. Okay? Or the value is very clear. But when you actually have a stock option that is that is, that is, 50 or 70% discounted the strike price compared to the current share price, it is actually something that as an employee and university you must look into

because it's actually a very competing opportunity. Man, I can't stop thinking about the whiz, like $5 million. I mean, that's, I think I'm just going to like close all my business. 5.2 now. 5.2 million. I think I'm going to move to Silicon Valley. I'm going to shut everything I'm doing down. and I'm just going to work for some startup.

I think I'm going to go all in, and I'm doing the wrong thing. But, you know, a year ago, I never even heard of investing in to private companies. I only knew about the stock market, which I've been in for a long time. And when I heard about this a year ago, there was a woman who said, this is the biggest place of investment in the near future. She said that a year ago. So what I saw Equity B, what you all were doing, but CEO and founder of Equity B, Orin, Barzielai, man, I learned a lot.

I can't wait. We got to reconnect. Every time a new company goes public, I'm going to send you a message because I'm just so fascinated right now. There's like 15 companies that are on my mind. Thank you for having me. I would just add, it's not about going public, M&A and tender offers. We support employees that can benefit from all of those liquidity channels.

Happy to be here and it was out of last. Thank you.