Employee Mutual Insurance Pool

Make the equity in your offer letters bullet-proof.

A floor under the downside, upside your employees can keep, and liquidity before your exit, without ever touching your cap table. The Employee Mutual Insurance Pool (EMIP) covers the startup equity of employees at Series B to E companies. Each covered employee gets a contractual cash payout if your company fails, keeps the majority of the upside if you win, and holds dividend shares in the pool that pay them annually, for life. You can sponsor it as a benefit for about $5K per $1M covered per year. There is no dilution to your company, no voting rights or board influence, and the pool never appears on your cap table.

$5K/yr
Premium per $1M covered. Sponsorable as a benefit.
$500K
Payout per $1M covered, if the company fails.
~$2.5M
Median outcome per $1M covered, vs ~$0.8M uncovered.*
~0.20
Modeled loss ratio: claims against all inflows. The underwriting funds itself.*

You're in a talent war against the biggest balance sheets in human history.

When OpenAI, Anthropic, Google, or Meta calls your staff engineer, they call with liquid stock and near-certain outcomes. You counter with options in a private company: paper your employees mentally mark to zero in a down round, that they can't borrow against, and that pays nothing if the company misses.

Unfortunately, the tools on your side of the table are thin. Secondaries are episodic, discounted, and set a price while putting new investors on your cap table. Repricing burns the 409A and risks a lawsuit. And you can't compete on cash salary. The EMIP is a new arrow in the quiver: make the equity outcome more certain.

Your equity offer, before and after.

Same grant and vesting. The only difference is whether the equity is covered.

Uncovered equity Covered, $1M face in the EMIP
To the candidate A lottery ticket against big-tech RSUs. An asset with a contractual floor, lifelong dividends, and borrowing power.
If the company fails They walk away with nothing, and remember it. A $500K payout per $1M covered, in cash over three to five years, or extra pool shares.
Liquidity before exit Secondaries: episodic, discounted, price-setting, new investors. They borrow against their pool ownership. No sale, no discount, no new shareholders.
Your cap table and governance Tenders bring outsiders on. Untouched. We never hold your stock. Cost: $5K per $1M per year, a rounding error next to the cost of a counter-offer or a backfill.
You can't compete on cash salary. The EMIP is a new arrow in the quiver: make the equity outcome more certain.

What your employees get.

Benefit 01
A floor under the downside.
If the company fails, a covered employee receives 50% of their covered equity in cash, over three to five years, or they can opt to swap for larger life-time dividends.
Benefit 02
Ownership for life.
One dividend share per $1M covered, paying a pro-rata slice of the pool's annual dividend to them for life.3 In a fail scenario they can also receive extra dividend shares, instead of cash up front.
Benefit 03
Upside they keep.
If your company wins, employees still get the upside; they just share some back with the pool. In fact, their expected return is higher if they are covered by the EMIP in all but the largest exit scenarios.*
Benefit 04
Liquidity, years earlier.
Pool ownership they can borrow against, e.g. a house deposit before your IPO, without selling a share or asking you to run a tender.
The Math

Better off, in all but the biggest exits.

The pool takes a sliding share of the upside, higher on low returns, smaller on high-return outcomes, priced to your company's risk profile, with the goal that a covered employee is better off in all but the largest exit scenarios.

Covered employee outcomes
Exit Uncovered,
post-tax
Equity /
payout
+ Dividends &
pool shares‡
Total,
covered
Failure (0×)$0$500K+$2.00M$2.50M
1×$800K$160K+$2.00M$2.16M
3×$2.40M$960K+$2.00M$2.96M
5×$4.00M$2.08M+$2.00M$4.08M
10×$8.00M$5.08M+$2.00M$7.08M
20×$16.00M$12.28M+$2.00M$14.28M

At median company pricing, per $1M covered, post-tax; totals are expected values.* ‡ ~$1.68M cumulative dividends + ~$0.32M pool-share value, the same in every row, because dividend shares are minted per $1M covered, not per outcome. One member in three lands on the failure row.

How the sliding share works. The pool's share of the gross exit multiple is set per tranche of return, like tax brackets: each slice is split at its own rate. The pool is paid mostly from the downside slices, and the biggest winners keep 90% of everything above 10×.

Tranche of returnPool shareEmployee keeps
0 to 1×80%20%
1 to 3×50%50%
3 to 5×30%70%
5 to 10×25%75%
Above 10×10%90%

Members, not just policyholders.

Like a whole-life insurance policy, covered employees become members of the mutual pool, with long-term dividend rights in its profits, proportional to equity covered. The pool pays out surplus profit to its members annually, for the life of the pool.3

Where the money comes from, for the average employee covering $1M of equity:*

Mutual dividends received$1.68M
Equity upside they keep$0.94M
Their pool shares, at horizon$0.32M
Failure payouts, in cash†$0.12M
Reinvested claim shares$0.06M
Premiums, paid by your company$0.02M
Mean outcome (median: ~$2.5M)~$3.1M

Averages, so components add exactly; premiums are paid by the employer, so they are not deducted from the member. Uncovered: mean ~$1.8M, median ~$0.8M. † Averaged across all members; a failed member receives the full $0.50M per $1M covered.

For the CFO

Sober numbers underneath.

The model is calibrated to your company's late-stage reality, not seed-stage lottery math: PitchBook puts Series D+ outright failure near 13%; we model a conservative 30% blend for B to E exposure, winners capped at 30×, exits in ~3 to 7 years. On those assumptions the modeled loss ratio, claims against all inflows, runs around 0.20: the underwriting funds itself, and dividends are paid from surplus, not from new members' premiums.*

Failure rate modeled
30%
Conservative B to E blend; PitchBook puts Series D+ near 13%.
Winners capped at
30×
Late-stage tail, α = 3.0; exits in ~3 to 7 years.
Loss ratio
~0.20
Claims against all inflows. Self-funding underwriting.
Cap-table impact
0
We never hold your stock. No dilution, no votes, no board influence.

We don't publish a public simulator for the EMIP. The model, its calibration, and the tranche pricing for your company are available to the companies we're underwriting; ask us to walk you through it on a call.

We underwrite your company first.

We are multi-decade venture investment veterans, and we only cover employees at companies we would underwrite and invest in ourselves. So being coverable is a strong positive signal you can put in an offer letter. And the floor is deliberately partial: 50 cents on the covered dollar. Employees still want the win; the EMIP just makes saying no to the inbound recruiters more rational.

Companies
Series B to E, underwritten by Rising Tide first
Premium
$5K per $1M covered, per year, sponsorable as a benefit
Payout on failure
$500K per $1M covered, over three to five years
Pool share of upside
Tranched: 80 / 50 / 30 / 25 / 10% by return band
Membership
One dividend share per $1M covered, for life
Manager
Rising Tide Management LLP. Structure in structuring.4
Who It's For

Is the EMIP right for your company?

Cover your team from Series B onward, when the poaching starts and your equity story needs teeth. If you're a founder rather than a company, we built something for you too.

Arm Your Offer Letters
CEOs, CFOs and CHROs of Series B to E companies
Tell us about your company, your stage, and roughly how many employees hold equity. We underwrite the company first and come back with tranche pricing for your risk profile.
A seed-stage founder?
Pre-seed and seed founders
The Founder Mutual Insurance Pool (FMIP) is the founder version of the same chassis: insure up to 10% of your stake, receive a contractual payout if the company fails, and hold dividend shares in every founder we insure, for life.

Common questions.

What does it cost, and who pays?

About $5K per $1M covered, per year. The company can sponsor it as a benefit line item, or the employee can pay the premium directly.

Does the EMIP touch our cap table?

No. The contract sits on the employee's own equity. The company issues nothing, dilutes nothing, grants no voting rights or board influence, and the pool never appears on the cap table.

How much upside does a covered employee give up?

A sliding share by tranche of return: 80% of the first 1×, 50% of 1 to 3×, 30% of 3 to 5×, 25% of 5 to 10×, and 10% of everything above 10×. The employee keeps the rest, plus their dividend shares. At default pricing they are better off in all but the largest exits.

What happens if our company fails?

Each covered employee receives a contractual payout of 50% of their covered equity ($500K per $1M covered), in cash over three to five years, or as extra dividend shares in the pool.

Which companies qualify?

Series B to E companies that Rising Tide underwrites first. We only cover employees at companies we would invest in ourselves, so being coverable is a signal you can put in an offer letter.

The Bottom Line

A floor for your employees, a ~0.20 loss ratio for the CFO, retained upside for the CEO's offer letters. And not one new name on your cap table.

Cover your team from Series B onward, when the poaching starts and your equity story needs teeth.

* Illustrative and hypothetical. Not a forecast, guarantee, or offer. Figures are Monte-Carlo output at the EMIP model's defaults (200 paths; 30% failure, α = 3.0, 30× cap, ~3 to 7-year exits, per PitchBook Q3 2024 and Carta data): median covered-employee outcome ≈2.5× covered face, mean ≈3.1×, versus ≈0.8× median and ≈1.8× mean uncovered, over a 40-year horizon, with premiums paid by the employer, including retained upside, payouts, dividends, and pool-share value. Modeled loss ratio ≈0.20 (claims against all inflows). Worked exits use the default tranches (80/50/30/25/10%) and simplified tax assumptions (20% on a zero basis). Model verified 10 September 2026.

† Averaged across all members; a failed member receives the full $0.50M per $1M covered.

‡ Approximately $1.68M cumulative dividends plus $0.32M pool-share value per $1M covered, identical in every exit row because dividend shares are minted per $1M covered, not per outcome.

3 Dividends are paid only from pool surplus and are not fixed obligations. Payouts, dividends, and pool values are model outputs and targets, not promises.

4 Individual tax and QSBS treatment vary; consult your advisors. All terms are indicative and subject to final terms, underwriting, and regulatory approvals. The structure is in structuring; no insurance policy or security is offered hereby, and no regulatory approval has been sought or obtained. Rising Tide Management LLP.