By Ifty Nasir, founder and CEO of Vestd

In my time as founder and CEO at Vestd, I’ve spoken to thousands of small business owners and I know that there’s one thing that everybody worries about: getting great people on board and getting them to stick around.

Happily, I also know that there’s a compelling way to attract and keep hold of that talent – growth shares!

Over the past five years we’ve seen a big jump in interest in growth shares (250%), especially from startups and early-stage businesses who want to reward their team but don’t necessarily have deep pockets yet.

So what exactly are growth shares, and should they be on your radar?

What are growth shares?

Growth shares are a special kind of share that only gain value if your business grows above a certain threshold.

Let’s say your business is worth £1 million today. You give a team member some growth shares that only become valuable if the business grows past that point – say, to £2 million. If your company doesn’t grow, those shares don’t pay out. But if it does, they get a slice of the value created above that original point.

In short: people are rewarded for helping your business grow after they join. That’s why they’re so useful for small businesses trying to attract key people without emptying the bank balance.

Why more small businesses are using them

Here’s what folk tell us about why growth shares make sense to them:

1. They keep people focused on long-term success

When someone has a stake in the business, they think and act like an owner. That often means better decision-making, more commitment, and a genuine drive to help the business succeed.

2. They’re flexible

Growth shares can be tied to specific goals, like ‘launch the product,’ ‘stay with the company for 3 years,’ or ‘win X new customers.’ 

If you choose to take that path, your recipient will be intensely incentivised to smash their goals and to improve the fortunes of the company (thus growing their eventual cut!).

You’ll only give away equity when the value has actually been created. You stay in control, and the recipient is motivated to make it happen. Nice.

3. They work when other schemes don’t

The EMI (Enterprise Management Incentive) scheme is a popular way to give shares to employees, but it comes with a long list of restrictions. Your company has to be under a certain size, for example, and some industries are ineligible.

Growth shares don’t have those restrictions. You can give them to freelancers, consultants, advisors – whoever’s helping you grow the business.

What the research says

Research from HM Treasury found that companies with tax-advantaged share schemes were twice as productive as those without them.

It makes sense. When people feel like part-owners, they care more. They stay longer. They go the extra mile.

At Vestd, we’ve seen it first-hand: giving people a stake in the business changes how they show up. It creates a stronger team and a healthier culture – and that’s worth its weight in gold for small businesses.

How to manage equity (without the stress)

Equity can sound intimidating. But it doesn’t have to be. Here’s how to keep things simple:

• Get advice early. A good accountant or equity expert can help you decide the best way to set things up.
• Use a sharetech platform. Tools like Vestd make it easy to issue, track and manage shares online. No spreadsheets or legal headaches.
• Be clear with your team. If someone’s getting shares, make sure they know what they need to do to unlock the value. That clarity builds trust and accountability.

Final thoughts: a smarter way to share success

Growth shares are popular right now because they offer a simple, fair and flexible way to reward the people who help you grow. Whether you’re a sole trader taking on your first hire, or a small team scaling fast, they’re well worth a look.

They don’t just make financial sense – they send a clear message: we’re in this together. 

And that’s a powerful thing in today’s fast-moving world of work.