Unmasking i-deal practices in start-ups to attract, motivate and retain STEM employees

The global economy has generated a highly competitive and dynamic ecosystem that has transformed the way organisations attract, motivate, and retain (AMR) employees (Almeida and Oliveira, 2023). A prominent trend in this context is the increasing use of customised job conditions, known as idiosyncratic deals (i-deals), to supplement conventional standardised work arrangements (Rousseau, 2001; Simosi et al., 2023).

In recent years, i-deal negotiations have been accelerated by a decline in collective bargaining (OECD, 2019) and the need to align with new remote and virtual ways of working brought about by the COVID-19 pandemic (Van der Heijden et al., 2021). Consequently, the employee–organisation exchange relationship has evolved to a more balanced state in which employees—particularly the highly valued ones who are an indisputable source of competitive advantage—have more room to request i-deals that meet their needs and interests (Almeida and Oliveira, 2023; Simosi et al., 2021). In turn, organisations benefit from attracting, motivating and retaining talent that might otherwise not be available (Simosi et al., 2023; Wasti et al., 2022).

Despite the relevance of i-deals and the increasing body of literature on the topic, their application in start-ups remains largely unexplored (Anand and Rofcanin, 2022; Sánchez-Turón et al., 2025). This is particularly noteworthy given that these small, fast-growing organisations significantly impact the economic and social development of countries by fostering innovation and rapid job creation (Komninos et al., 2024). Notably, across OECD economies, early-stage start-ups operating in high-growth sectors employ around 20% of the workforce and are responsible for nearly half of all new jobs (OECD, 2021). These promising results are often observed in entrepreneurial ecosystems with supportive policy environments, access to funding, and talent availability.

However, securing the “right human capital” with valuable competencies (Sauermann, 2018, p. 425) remains a significant challenge for ventures, given their inherently high risk of failure, limited reputation, scarce resources, and frequent lack of human resources (HR) specialists (Almeida and Oliveira, 2023; Priyanka et al., 2023).

Indeed, HR practices in the entrepreneurial context have been largely overlooked, even though they are a catalyst for innovation (Jebali and Meschitti, 2021). In particular, studies on i-deals have predominantly focused on established companies, leaving start-ups out of the loop—even though a better understanding of the topic could boost AMR and reduce start-up failure (Kozusznik et al., 2020). Thus, this study aims to expand the knowledge of i-deals as an HR practice in start-ups.

Start-ups often adopt informal HR practices (Priyanka et al., 2023), relying on minimal headcounts (Rabideau et al., 2016) and recruiting primarily inexperienced employees (Lee, 2022) from business and personal networks (Leung et al., 2006) who align with the venture’s mission (Rabideau et al., 2016) and entrepreneurial motives (Sauermann, 2018).

Furthermore, the uncertain working context and constant interaction on product development in start-ups make it difficult for employees to balance work and personal life, increasing stress levels and staff turnover (Omrane et al., 2018). As recently noted by Ammirato and colleagues (2024), start-up entrepreneurs should consider how their organisational cultures and work environments influence employee well-being and proactively support work-life balance and overall satisfaction.

Given these dynamics, i-deals are a key tool for providing start-ups with a broader pool of valuable employees to ensure operational continuity, while reducing turnover and recruitment costs (Singh and Vidyarthi, 2018), by offering flexible work arrangements or professional development opportunities (Ammirato et al., 2024).

This study explores i-deals in health technology start-ups, given their greater expected prevalence among science, technology, engineering, and mathematics (STEM) workers, who are increasingly in high demand (Ayuso et al., 2022) due to their pivotal role in innovation and venture success (Sauermann, 2018).

By integrating the literature on i-deals and start-ups, this qualitative research examines: (1) the heterogeneity of i-deals in terms of timing and content (Yang, 2020), and (2) their impact on AMR talent (Bal, 2017; Rousseau et al., 2016).

This study addresses previous research gaps by first shifting the focus beyond employees as primary informants to include start-up C-level employers—such as CEOs, CTOs or CFOs—as reliable organisational participants (Taser et al., 2022). Second, it broadens the scope by examining not only employees who were granted i-deals but also those who were unsuccessful or did not perceive a need for them (Anand and Rofcanin, 2022; Bal, 2017). Finally, it expands the contexts in which i-deals have been explored, addressing the gap in understanding i-deals within start-ups (Sánchez-Turón et al., 2025). By bridging these gaps, the research integrates the empirical literature on i-deals and start-ups, offering novel insights into their role in HR and talent management within small, innovative, and resource-constrained workspaces.

I-deals are “voluntary, personalized agreements of a nonstandard nature negotiated between individual employees and their employers regarding terms that benefit each party” (Rousseau et al., 2006, p. 978). Four features define i-deals: (1) they are individually negotiated by employees and their current or future employers, initiated by either party; (2) they represent heterogeneous employment conditions that differ from those of peers; (3) they aim to benefit both the employee and the organisation without disadvantaging co-workers; and (4) they vary in scope depending on the elements negotiated (Rousseau et al., 2006).

Scholars classify i-deals according to the timing and content of negotiation. In terms of timing, i-deals can be negotiated before employment—ex-ante—or once the employment relationship is set up—ex-post— (Rousseau, 2001). While ex-ante i-deals are typically linked to the labour market context and the candidate’s qualifications, ex-post i-deals are more likely to be shaped by the existing employment relationship (Rosen et al., 2013).

I-deals content may take the form of flexibility i-deals, which aim to support optimal work-life balance. These involve adaptability in location, schedule (e.g. adjustable working hours or reduced time or workload) or time (e.g. extra holidays or sabbatical periods); development i-deals, which refer to tailored training and growth opportunities for professional advancement and visibility within the organisation; task i-deals, which customise the employee’s job content and responsibilities; and financial i-deals, which involve increases in salary, bonuses or benefits (Gascoigne and Kelliher, 2018; Hornung et al., 2009; Rosen et al., 2013). Research to date has primarily focused on ex-post i-deals, as they better describe the quality of the employee-employer exchange relationship (Rousseau et al., 2006) and on single flexible or development i-deals (Rofcanin et al., 2021; Yang, 2020).

Notably, the negotiation of one type of i-deal can occur independently, without being contingent upon bargaining for or securing others. However, as noted by (Rosen et al., 2013), the content of i-deals is occupation-specific. Certain i-deals may be unsuitable for specific roles, while in other cases such agreements may be unnecessary as they align with established norms.

Furthermore, research to date indicates that i-deals are more prevalent in small group settings, where managers can easily uphold agreed terms on a daily basis, and in organisations that employ skilled, marketable workers with strong negotiation abilities (Huo et al., 2014). These personalised arrangements have been shown to reduce turnover and recruitment costs, contributing to organisational efficiency (Singh and Vidyarthi, 2018).

Empirical studies suggest that i-deal arrangements are influenced by employees’ proactive traits (Srikanth et al., 2022) and are most successfully negotiated by high-performing workers with extensive experience and outstanding skills, who provide unique, hard-to-replace value to the organisation (Rosen et al., 2013; Rousseau, 2001; Rousseau et al., 2006).

However, without a clear understanding of the context and motivations behind their creation, such differences in working conditions within the same organisation may create perceptions of inequity, undermining workplace justice, cooperation, and trust (Marescaux et al., 2019; Simosi et al., 2023). Conversely, when effectively managed, i-deals are associated with positive outcomes, including increased job performance (Rofcanin et al., 2021), job satisfaction (Velasco Vizcaíno et al., 2023), work motivation (Velasco Vizcaíno et al., 2023), affective commitment (Hornung et al., 2008), and organisational citizenship behaviours (Singh and Vidyarthi, 2018).

However, the profile of start-up employees differs significantly from those in traditional organisations, where this topic has been explored. In start-ups, a variety of i-deals may be negotiated over time, not only to meet employees’ personal needs and preferences (Simosi et al., 2021), but also to enable the flexible generation and execution of novel ideas with constrained resources (Lee, 2022). This study examines i-deals within the start-up context, applying social exchange theory and resource exchange theory, both of which have been pivotal in explaining the i-deals process (Sánchez-Turón et al., 2025).

The i-deals phenomenon, initially described by Rousseau (2001) and grounded in social exchange theory (SET), explains how the employee-organisation relationship is embedded in an exchange process of mutual contributions (Blau, 1964). Receiving an i-deal generates in the employee an innate impulse to reciprocate the employer and the organisation with constructive behaviours (Singh and Vidyarthi, 2018), as well as encouraging co-workers to “keep the peace” and avoid jealousy (Huo et al., 2014).

Since its introduction, most studies have built on the reciprocity argument (Hornung et al., 2009; Liao et al., 2016), which can reflect a social—trust, loyalty or willingness—or economic exchange (Anand and Rofcanin, 2022). Resource exchange theory (RET), developed by Foa and Foa (1974), has been used as a complementary approach, focusing on the types of resources exchanged and the reasons why (Mitchell et al., 2012). Within this framework, Bal and colleagues (2012) classified i-deals into hard and soft types.

Hard i-deals involve concrete, universal, objective, and measurable interactions, often resulting in an economic exchange (Saldivar and Liao, 2023). These agreements include financial benefits, task adjustments and schedule flexibility (Rousseau et al., 2009). In contrast, soft i-deals are more symbolic, particularistic, subjective, and relational. They foster social exchanges in which the employer demonstrates care for the employee’s well-being, thereby strengthening the quality of their relationship (Saldivar and Liao, 2023). Soft i-deals encompass development opportunities or location flexibility (Rousseau et al., 2009). Previous research has suggested that in times of crisis, or in contexts in which managers are constrained in adjusting existing pay structures, there is a tendency to substitute hard i-deals with more particularistic, non-monetary soft ones (Davis and Van der Heijden, 2018; Wong et al., 2023).

The present study integrates SET and RET as a theoretical framework to describe the exchange derived from i-deal negotiations between STEM employees and C-level executives. While high-quality employment relationships are characterised by higher levels of social exchange and lower levels of economic exchange (Rousseau et al., 2009), both exchange types may coexist and interact with in health technology start-ups, where financial and human resources are limited (Lee, 2022).

The dataset consists of 42 semi-structured interviews with two participants—a STEM employee and a C-level employer—from 21 health technology start-ups in Spain. Of the participants, 23 were female and 19 male, aged 24 to 54. Regarding start-up ownership, 20 of the C-level participants were co-founders, while only one STEM employee held a co-founder role. Table 1 presents an overview of the participants.

The health technology start-ups for this study were sourced from Dealroom.co, a comprehensive open-access database for monitoring start-ups globally that has been increasingly cited in academic research (van Meeteren et al., 2022). The selection criteria focused on companies incorporated since 2011, with 2–50 employees and a turnover or balance sheet total not exceeding €10 million, in line with the European Commission’s definition of small and medium enterprises (European Commission, 2021).

Initially, 137 out of 1,155 firms were listed as working in health tech in Spain. Of these, only 57 were still operational and met the eligibility criteria at the time of data collection. Stratified purposeful sampling (Patton, 2002) was used to ensure representation of the above-mentioned population across relevant subcategories, specifically the venture technology focus—biotechnology, medical devices, or digital health—and the geographic distribution within Spain to capture a range of regional perspectives and challenges.

To initiate recruitment, we invited a random sample of 35 start-ups. Eight did not respond, two preferred not to participate, and one had fewer than two employees at the time. As a result, 24 start-ups (68.57%) were further debriefed, yielding a high response rate considering the demanding schedules of start-up employees and C-levels. Data saturation was reached with 21 start-ups when no new information emerged, and interviewee redundancy signalled that data collection could cease (Bowen, 2008).

The participating start-ups ranged in size from 2 to 15 employees, with a median age of nearly four years. Ventures were recruited from eight of the 17 autonomous communities of Spain, and there was equitable representation across different working technologies. Table 2 presents an overview of all the ventures.

C-level employers were recruited via email by the first author, who then asked them to identify and endorse a STEM employee with at least four months of tenure in the start-up. This approach was designed to encourage employee participation. Interested individuals received detailed information about the study, data protection policies, and informed consent.

A semi-structured interview, guided by 19 open-ended questions, examined i-deal negotiations, focusing on content heterogeneity, initial aspirations, the negotiation process, and the resources—whether available or lacking—that influenced agreements. The interviews also explored how agreements were communicated to the broader team and the benefits derived for the employee, start-up, and co-workers (see  Appendix 1 for the interview protocol). To enrich the data, participants were encouraged to share as many detailed examples as possible. At the end of the interview, they were invited to offer any additional insights or reflections they considered relevant (Lanka et al., 2020).

The one-on-one interviews were conducted online in Spanish by the first author between 28 October 2021 and 12 January 2022. With participants’ permission, all interviews were video recorded, lasting between 22 and 68 min, with an average length of 44 min. To guarantee employee confidentiality, C-levels were interviewed before employees (Davis and Van der Heijden, 2018), and did not participate in a second round of interviews, even though doing so could have enhanced the credibility of the findings (Guba and Lincoln, 1994).

After data collection, verbatim transcripts of the interviews were generated using HappyScribe software and manually reviewed by the first author for accuracy.

The template analysis model provided the framework for interpretative analysis of the dataset, following the principles of flexible thematic analysis proposed by Braun and Clarke (2022). This method emphasises the iterative development of a coding template with hierarchical codes (see  Appendix 2). The a priori codes were proposed by the first author based on the literature. Upon re-reading the transcripts, the research team met three times to refine these codes and discuss new ones, focusing on meaningful or recurrent information. Codes were then grouped into themes according to their content. The coding process, conducted using ATLAS.ti Version 22, involved repeatedly revisiting the themes and transcripts for refinement and validation purposes. Lastly, after a group analysis of five interviews, the researchers agreed that the template comprehensively captured all relevant data, requiring no major modifications.

Overall, the findings show that i-deal negotiation in health technology ventures positively influenced entrepreneurs’ and STEM employees’ satisfaction, while enhancing the ability to attract, motivate and retain (AMR) value-added employees.

The results also reveal that in start-ups (1) flexibility i-deals on location and schedule were the norm, (2) customised financial arrangements, primarily understood as phantom share issuance, were reserved for key STEM employees, (3) training opportunities as part of career development were facilitated by external advisors, board members and/or by attending events, (4) task i-deals to change the job content were intrinsic to the development phase, although they were not always granted to enhance employee job satisfaction, (5) i-deal communication was in most cases fully transparent, except in the case of financial i-deals, which were typically kept confidential, and (6) when access to certain resources was limited, i-deal negotiation became central to the AMR of STEM employees.

One of the most significant findings was the widespread involvement of employees in i-deal negotiations. This contrasts with established organisations, where i-deals are often reserved for star performers (Guerrero et al., 2014). These negotiations were commonly described as straightforward, single-round conversations rather than complex customised arrangements. In addition, the three most salient types of i-deals identified were career development, task and financial.

Participants reported that flexibility i-deals on location and schedule were often granted by default, as this was considered the norm, unlike in other organisational contexts. However, the extent to which these i-deals were offered varied greatly depending on the nature of the work performed by STEM employees. In particular, such i-deals were more restricted in biotechnology and medical device ventures, where a large part of the team worked in laboratories conducting tests and experiments.

With the onset of the COVID-19 pandemic, start-ups adopted a range of flexible work arrangements, including fully remote work, hybrid models requiring at least one day in the office per week, and full flexibility to choose between working from home or the office. Some fully or partially remote employees also negotiated ex-post to work from locations other than home due to personal needs.

Participants also mentioned negotiating work schedules to enhance work-life balance or to accommodate academic commitments, such as attending master’s or doctoral classes, conducting clinical research, or teaching at university.

However, reduced working time i-deals were reported by both parties as difficult to negotiate and grant, with start-ups’ minimal headcounts being the main reason for refusal. The success of these requests depended largely on the motives behind them, with most employees citing family responsibilities, such as caring for minors or dependents.

Likewise, although both parties share an entrepreneurial mindset, the findings revealed that employers perceived employees who reduced their working hours to pursue personal projects or business ideas as showing a lack of commitment or even disloyalty.

Finally, flexibility i-deals also involved negotiating the timing for holidays and stays abroad. Although these informal, ex-post negotiations were typically initiated by employees, their outcome largely depended on available human resources and business needs at the time.

Extensive evidence was found in the interview data for the occurrence of development i-deals, which most employees referred to as role-specific training in scientific or business topics. The training took the form of customised sessions, consultancy with external advisors or participation in events. Indeed, attending events was seen as crucial for professional advancement and visibility, as employees connected with key opinion leaders and peers from similar start-ups.

These negotiations were typically initiated by the employee ex-post in order to increase knowledge, job efficiency, and performance. In turn, start-ups granted development i-deals to foster more competent employees.

Start-up executives also reported frequent ex-post negotiations regarding authorship of scientific papers—particularly in start-ups collaborating with academic institutions—as well as negotiations concerning formal job titles.

Regarding task i-deals, our findings indicated that adjustments to job content and responsibilities were common in start-ups due to the scarcity of human and financial resources. Interviewees reported that in the initial phases of the venture, there was a considerable amount of work to be done. Consequently, STEM employees looking to broaden their skills negotiated new tasks to make their roles more motivating and increase job satisfaction. Once the product or service was developed, participants described how STEM employees adapted their tasks to either develop a new product or validate the existing one.

Furthermore, as start-ups grow, new managerial positions are created. Interviewees reported successful negotiations for promotions to group leader roles, strengthening the exchange relationship.

However, both employees and C-levels agreed that radical changes of task not tied to company needs were generally considered non-negotiable.

In start-ups, financial i-deals were reported for salary, benefits, and phantom share negotiations. Salary and benefit negotiations were primarily initiated ex-ante by employees, although start-ups also proposed them ex-post for employees who overperformed or achieved key milestones.

Several C-levels and employees reported high dependency on the venture’s funding level for financial i-deal negotiations, to the point that some interviewees reported that these i-deals were non-negotiable at certain points in the start-up’s lifecycle. This once again demonstrates employees' understanding of the motives for refusal.

Finally, participants reported that start-ups negotiated phantom shares to supplement the salary of employees who performed excellently and offered critical know-how.

One of the most commonly reported themes by employers and employees was the use of i-deals to effectively AMR the most sought-after STEM employees in the labour market. This emerged as crucial for the continuity and performance of the start-ups. In early-stage ventures, i-deals helped attract early-career professionals, many of whom were still in education or training. More mature ventures used personalised i-deals to recruit senior professionals from industry, especially when monetary offers alone were uncompetitive.

In addition, participants reported that i-deals fostered commitment and motivation. Employees appreciated flexibility, autonomy, and recognition, which in turn generated an intrinsic desire to reciprocate and increased their willingness to go the extra mile.

I-deal negotiations were also reported as a fundamental instrument for retaining valued employees and reducing turnover. The outcomes of these i-deals were described as a win-win for both parties, as they addressed each party’s individual needs and circumstances.

When it came to retention through financial i-deals, C-levels reported substituting hard, concrete salary-based i-deals with softer, symbolic ones such as development opportunities, phantom shares, and location flexibility, due to start-ups' limited access to funds and talent. Regarding phantom shares, both C-level executives and employees highlighted their importance as a method to attract talent when negotiated ex-ante, and to retain employees long-term when negotiated ex-post.

On several occasions, interviewees highlighted that the communication of granted and refused i-deals was transparent. This helped applicant employees and their co-workers understand the motivations behind such individualised working conditions and the context in which the start-up operates. In contrast, participants reported that financial i-deals were kept confidential to avoid perceptions of inequity among co-workers.

To conclude, employees who received i-deals reported strengthened trust in their employer, improved workplace cooperation, and greater alignment with the start-up’s mission. These agreements made them feel valued, heard, and personally invested in the venture’s success.

Attracting, motivating and retaining (AMR) valuable employees is a persistent challenge for start-ups (Almeida and Oliveira, 2023). Our findings support the idea that health technology start-ups negotiate a variety of i-deals to overcome this challenge by customising the job conditions for STEM employees. The i-deals described by the interviewees cover, with varying degrees of relevance, the four content domains—flexibility i-deals, development i-deals, task i-deals and financial i-deals. We believe the lack of standardised human resource practices in start-ups, combined with openness to employee requests, helps employees understand which resources are available, thereby boosting their confidence to ask for them (Rabideau et al., 2016; Rousseau et al., 2016). In line with the findings of Rosen et al. (2013) on the timing of i-deals, this study has identified a tendency to negotiate most i-deals ex-post when employees have demonstrated their value to the venture and understand the start-up context and available resources. Even so, we also observed ex-ante negotiations aimed at attracting talent or establishing initial salary agreements.

Furthermore, this study reinforces the perspective that certain employee characteristics enhance i-deal availability. Specifically, in start-ups with limited human resources, possessing relevant STEM expertise and demonstrating high performance significantly increase the likelihood of securing i-deals. In contrast, a lack of negotiation skills and modest job tenure appear to be non-determinant factors (Rosen et al., 2013).

As an additional insight into the uniqueness of i-deals in start-ups, we argue that resource constraints establish important boundary conditions for negotiating i-deals (Rosen et al., 2013). Our findings show how financial limitations hinder the negotiation of ex-post financial i-deals such as salary increases. Supporting previous research, we found that employees and C-levels often seek particular and symbolic resources, such as remote work, training or event attendance, as substitutes when financial options are unavailable (Davis and Van der Heijden, 2018). Therefore, enriching current theory, location flexibility i-deals and career development i-deals can result in an economic exchange when funding is lacking, as employees perceive them as a cost-saving alternative to commuting or as in-kind compensation for the absence of monetary rewards (Saldivar and Liao, 2023). However, to maintain harmony and engagement in the workspace, employees need to understand the context and motives behind the granting or refusal of i-deals (Simosi et al., 2023). When flexibility i-deals on location or schedule are negotiated in response to a personal need, rather than as substitutes for unavailable resources, our findings suggest that these agreements result in social exchange, as supported by recent research in the field (Saldivar and Liao, 2023). Expanding on previous research (Rousseau et al., 2009; Saldivar and Liao, 2023), we also found that flexibility i-deals involving reduced time or workload, special holiday periods or stays abroad, as well as financial i-deals in the form of phantom shares, are often associated with social exchange, despite being accompanied by salary adjustments. We argue that these exchanges strengthen the quality of the relationship, since the employer demonstrates genuine concern for the employee’s well-being and personal needs (Rosen et al., 2013). These findings support the idea that economic and social exchanges are not mutually exclusive (Rousseau et al., 2009). An understanding of i-deals through the lenses of both SET and RET is therefore necessary in the start-up context.

The last contribution of the study supports previous research linking the use of i-deals to AMR talent (Liao et al., 2016). Our findings reveal that, in start-ups, i-deal negotiations are used to attract young employees who are still completing their formal education and/or senior professionals from industry. A possible explanation for this finding is that ex-ante i-deals make employees feel heard and supported in achieving a better work-life balance, helping to mitigate possible doubts related to the high risk of failure and the start-up’s limited reputation (Almeida and Oliveira, 2023). For similar reasons, ex-post i-deals help keep employees motivated, and are therefore a clear competitive advantage for the venture. Echoing previous studies, these i-deals can foster a sense of reciprocity between employee and employer (Davis and Van der Heijden, 2018), reinforcing trust (Elgoibar et al., 2021). Ultimately, negotiating i-deals over time with motivated employees also enhances retention—especially through flexibility, development and phantom share arrangements—as shown in our results. These reduce employee turnover and the costs associated with hiring new staff (Singh and Vidyarthi, 2018).

Several theoretical implications can be drawn from this research. First, as the first exploration of i-deals in the innovative context of start-ups, this study expands the boundaries of existing i-deal theory, which has predominantly focused on large and medium-sized organisations (Bal, 2017; Las Heras et al., 2017; Rofcanin et al., 2018, 2021) or public institutions with bureaucratic models, such as hospitals (Bal et al., 2012; Davis and Van der Heijden, 2018; Hornung et al., 2008). This invites future research to explore how the fluid and dynamic nature of start-ups challenges that differ from those faced by established organisations (e.g. public institutions, multinationals), particularly concerning existing theoretical models of i-deals and their negotiation processes and outcomes. Future studies could, for instance, compare traditional companies with start-ups in terms of how i-deals are initiated and granted.

Second, our research goes beyond the dominant SET perspective (Liao et al., 2016) by incorporating the RET perspective, shedding light on how start-ups’ limited resources shape which i-deals are requested and granted. In this context, both theoretical lenses complement each other and provide a more comprehensive explanation of the i-deal process. This integration suggests that resource constraints are a critical boundary condition among start-ups, highlighting the need for future theory to more explicitly account for organisational context when predicting i-deal processes and outcomes (Martínez-Corts et al., 2023).

Third, our findings suggest that existing i-deal categories may need refinement to reflect start-up particularities. While stock-based incentives have been reported in previous research (Sun et al., 2020), we introduce phantom shares as a distinctive form of financial i-deal. This is particularly relevant for organisations with limited financial resources and structured benefits, as phantom shares allow employees to participate economically in the company’s long-term success without receiving actual shares (Feng and Li, 2020; KPMG, 2019). These differ from traditional financial i-deals—which are more transactional, immediate, and impersonal (Ho and Kong, 2015; Hornung et al., 2009).

Conventional compensation seeks to reward a specific, short-term contribution, with minimal emotional attachment or reciprocal obligation (Rosen et al., 2013). In contrast, phantom shares are inherently long-term and performance-based, requiring sustained employee commitment. This structure introduces a motivational dimension: employees are incentivised to contribute to the organisation’s long-term goals in order to receive future rewards. While conventional financial i-deals often compensate short-term achievements, phantom shares foster ongoing alignment with the company’s performance and objectives. As such, they emerge as a novel and strategic form of financial i-deal, particularly relevant in start-up contexts where immediate monetary rewards may not be feasible (KPMG, 2019).

Additionally, location and schedule flexibility i-deals appear to be the norm for non-laboratory roles, reinforcing the view that i-deal content is closely tied to occupational roles (Rosen et al., 2013).

Our study offers several practical implications for C-level executives in start-ups seeking to leverage i-deals to AMR outstanding and highly qualified employees (Yang, 2020). Firstly, C-level employers should foster a culture of open and structured dialogue by implementing regular check-ins, such as quarterly development conversations or one-on-one meetings, designed to address both role-related and individual needs. While role-related discussions may focus on responsibilities, development goals, or performance expectations, these touchpoints can also create psychological safety for employees to express personal preferences or constraints (e.g. flexible hours, remote work). In parallel, leaders should manage expectations and maintain alignment through regular top-down updates via town halls or team retrospectives (Rabideau et al., 2016).

As phantom shares are long-term i-deals that are often less visible due to pay secrecy practices, they may not trigger co-worker reactions (Wong et al., 2023). To use them effectively, C-level executives should engage in early planning with shareholders and financial advisors to define the purpose, structure, and scope of phantom share plans in alignment with the start-up’s funding strategy and growth roadmap. This includes outlining eligibility criteria (e.g. strategic roles or milestone achievements), establishing vesting timelines, and setting clear terms for payout events such as acquisition or IPO. While the details of these arrangements are typically confidential, a predefined internal framework ensures consistency and facilitates timely, strategic decision-making when negotiating with key talent.

Lastly, to avoid the inefficiencies associated with frequent ad hoc deals, C-level executives could implement a lightweight i-deal governance process. This may involve mapping critical roles and skill gaps within the organisation to identify where tailored arrangements can deliver the greatest strategic impact.

The exploratory nature of this study, which aimed to cover various aspects of the i-deal negotiation process, risked becoming overambitious and as a result presents several limitations. Firstly, despite a near-equal gender distribution, the sample may show age-related biases. 61.90% of C-level interviewees were aged 40–59, while over 76.19% of STEM employees were under 39. This age imbalance could influence job tenure and previous experience of negotiating i-deals.

Second, including both employees with standard work agreements and those with doctoral and post-doctoral research grants may limit the generalisability of our findings. Grants from public institutions typically include fixed conditions, preventing financial i-deals and thus affecting our results, as external factors hinder the potential for negotiation.

Third, all the interviewees came from Spanish start-ups. Although i-deal negotiation in the workplace is a global phenomenon, their processes and outcomes may differ substantially across cultures with varying norms of equality and reciprocity (Rousseau, 2006). For instance, institutional competitive advantage differs across European economies, especially between developed and catching-up countries (Skawińska and Zalewski, 2020). Nevertheless, we consider that internal dynamics, such as i-deal negotiation, may exhibit common patterns across different settings, due to shared start-up characteristics, such as resource constraints and an innovation-driven culture. Thus, while we advise caution, we believe this study offers insights that may be of interest to start-ups in other cultural contexts. Future research should replicate this study in other environments, especially where levels of entrepreneurial education, access to funding and public support differs.

Fourthly, the start-up sample was diverse in terms of distribution across technology areas, but all represented organisations were micro or small enterprises. It is therefore unclear whether these findings also apply to larger firms or those with different leadership norms and structures, such as family businesses or multinationals.

Fifth, the study’s cross-sectional design limits understanding of how i-deals evolve over time. A longitudinal approach would have yielded more robust insights into how i-deals are negotiated, renegotiated, or withdrawn over time, but this was not feasible due to access limitations. Specifically, our agreement with EIT Health—who facilitated data collection—allowed for a single round of interviews only. Securing repeated access to C-level participants proved particularly challenging given their limited availability and the early-stage nature of the start-ups. This led to the decision to explore the topic using a cross-sectional design. We suggest that future studies adopt a longitudinal approach to capture the dynamic nature of i-deal processes more comprehensively.

Lastly, the first author who scripted and conducted the interviews knew the C-level interviewees in advance, which could have created a power imbalance. However, strategies were adopted to mitigate this, such as providing detailed pre-interview information about the research and data protection, allowing C-levels to endorse a STEM employee, and conducting video interviews to create a more relaxed atmosphere.

Notwithstanding these limitations, our research provides directions for future studies to examine how i-deal negotiation processes may be shaped by different biases. First, future research should explore the gender dynamics underlying i-deal requests and outcomes, as gender equity remains a challenge in entrepreneurship (Jennings and Brush, 2013), particularly in STEM fields (Ayuso et al., 2022).

Second, co-founders’ bargaining power warrants closer examination, as their pivotal role in start-up establishment may lead to perceived imbalances or overconfidence when negotiating with other co-founders or C-level executives, potentially creating perceptions of inequity among co-workers (Liao et al., 2016), and fostering secrecy and competition (Yang, 2020).

Finally, while this study employed qualitative methods, quantitative research could assess whether our conclusions are replicated in larger samples and other cultural contexts (Gioia et al., 2012). Future studies could also adopt a longitudinal design to better explain the dynamics and outcomes of i-deal negotiation processes.

We thank the participants and the European Institute of Innovation and Technology in Health (EIT Health) for sharing information on start-up deal flow. We also thank the anonymous reviewers for their constructive feedback, which helped strengthen the final version of this article.