Usually, you will have lawyers start with boilerplate equity plans which they will then modify for each company. However, since each company is different, there is really no agreed standard when it comes to equity plans and there will ultimately be different versions that will depend on who the lawyer and/or company is. This process would often cost thousands of dollars in legal fees.
This process can also be expensive for workers. Since workers also have to review and understand the legal implications of the equity plan (i.e., determine whether it's a reasonable or a good deal to take), they will also need to find a lawyer and pay for legal review.
This is why there has been a move towards the standardization of legal agreements which is what Upstock is trying to do with its equity plans. Another good example is Y Combinator’s SAFE (Simple Agreement for Future Equity Agreement). Standardized legal agreements make it easy for people to trust that they will be treated justly and get their fair share. This is especially so if the standardized agreement comes from a trusted source like Y Combinator. The terms may be slightly modified and some variables could be changed, but the agreement’s core remains the same.
At Upstock, we are streamlining the equity plan creation process by allowing companies and workers to immediately work together and agree on an equity plan agreement that they can trust will be fair to both of them.