What is a Growth Share Plan?

Growth shares are a special class of share created so that, on a sale or other liquidity event, they only participate in proceeds above a set amount known as a “hurdle”. The hurdle is usually set at a premium to the company’s current value, so participants only benefit from genuine future growth.

They are often used to protect the value founders and existing shareholders have already built, while offering cost and tax efficiency to employees. Growth shares are commonly structured without voting or dividend rights, which keeps their initial value — and therefore the cost of acquiring them — low.