Employee Stock Options Programs (ESOPs) are the way most conduct this transaction. It's frequently a way for a founder to sell to employees due to relationships

Employee Stock Options Programs (ESOPs) are the way most conduct this transaction. It's frequently a way for a founder to sell to employees due to relationships/promises, to get a higher valuation than the market offers, or, like with options, to incentivize productivity and retention. The employees can get a loan with the business as collateral but the founder/s is going to hold a note as well. Assignments of stock are similar to options - customizable but more valuable employees get the lion's share.