Knowledge Base
Equity Compensation Guides
How RSUs, stock options, ESPPs, tender offers, and IPOs work, how each is taxed, and the decisions that come with them, from vesting and exercise to selling and diversifying.
33 guides
Deciding How Much to Sell in a Tender Offer
A tender offer decision is about how much, not yes or no. Weigh concentration, near-term goals, after-tax proceeds, and a range of company outcomes.
Deciding Whether to Exercise Startup Stock Options
Exercising options converts cash, and often tax, into illiquid company shares; the decision turns on cost, deadlines, tax timing, and money at risk.
Down Rounds and Employee Equity: What Actually Changes
A down round sells new shares below the prior round's price; for employees, the key effects run through dilution, preferences, the 409A, and repricing.
Early Exercise and the 83(b) Election, Explained
Early exercise lets you buy unvested option shares now. An 83(b) election, due within 30 days, taxes them at today's value instead of at each vest.
Early Exercise vs. Waiting: A Hypothetical Tax Illustration
A hypothetical walk-through of ISO tax mechanics: exercising at grant can avoid AMT that a later exercise may trigger, at the cost of risking cash early.
Equity Compensation in Divorce
Equity granted during a marriage is often partly marital property; courts use time-rule fractions, and taxes depend on how options and RSUs are split.
ESPP Strategy: Discounts, Holding Periods, and Taxes
An ESPP lets employees buy company stock at up to a 15% discount. Tax at sale depends on meeting the 2-year/1-year holding periods for §423 plans.
Executive Compensation, Understanding the Full Package
Executive pay combines salary, bonus, equity, deferred compensation, and severance, each with its own tax timing, vesting terms, and risk.
Explaining Startup Equity to Employees: What to Share
Employees can only value equity they understand. Share share counts, fully diluted totals, strike price, vesting, exit windows, and tax basics.
How Employee Stock Options Work: A Plain-English Primer
A stock option is the right to buy company shares at a fixed strike price. ISOs and NSOs are taxed differently, and ISOs can trigger AMT at exercise.
How to Evaluate the Equity in a Startup Job Offer
Evaluating startup equity means converting the grant into ownership, knowing the option type and tax rules, and testing value at several exit prices.
How to Evaluate the Equity in a Tech Job Offer
Equity in an offer is worth a range, not a number. Value depends on award type, strike price, dilution, liquidation preferences, and whether an exit occurs.
ISOs vs NSOs: How Stock Option Taxes Differ
NSO spreads are taxed as wages at exercise; ISO spreads skip regular tax but can trigger AMT, and qualify for long-term rates if holding periods are met.
Leaving a Startup With Stock Options: The Exercise Deadline
When you leave a company, vested options usually expire unless exercised within a set window, often 90 days, and ISOs lose tax status after three months.
Managing a Concentrated Stock Position: Ways to Diversify and What Each Costs
Reducing a large single-stock position usually combines staged sales, 10b5-1 plans, exchanges, and gifts over several years, each with its own trade-offs.
Non-Recourse Option Financing: Costs, Risks, and Trade-Offs
Non-recourse financing pays your option exercise and taxes in exchange for a share of future proceeds; you give up upside rather than take on debt.
Nonqualified Deferred Compensation (409A Plans): Rules, Taxes, and Risks
A 409A plan lets executives defer pay and income tax beyond 401(k) limits, but the balance stays an unsecured promise from the employer.
Planning Around a Liquidity Event: IPO, Acquisition, or Tender Offer
A liquidity event turns illiquid startup equity into cash or sellable stock. Tax, lockup, and diversification choices around it can matter for years.
Preparing for Your Company's IPO: An Employee's Checklist
Before an IPO, employees can map their equity, estimate the tax on RSUs and options, learn the lockup rules, and set a selling plan in advance.
Private-Company Tender Offers: Terms, Taxes, and Which Shares to Sell
A tender offer lets private-company holders sell some shares at a fixed price. The terms, share type, and holding periods decide what you keep after tax.
QSBS (Section 1202): Who Qualifies and How Much Is Excluded
QSBS can exclude federal gain on qualifying startup stock: up to $15M or 10x basis for stock issued after July 4, 2025. California still taxes it.
Retention Equity & Golden Handcuffs
Golden handcuffs are unvested equity and deferred pay you forfeit by leaving; weighing them means pricing the walk-away cost after tax and stock risk.
RSUs Explained: Vesting, Withholding, and Selling Decisions
An RSU is a promise to deliver company shares once vesting conditions are met. The value is taxed as wages at vesting, and withholding often falls short.
RSUs in an Acquisition: Vesting, Conversion, and Taxes
In an acquisition, the merger agreement decides if RSUs are cashed out, converted to buyer stock, accelerated, or cancelled; vesting is taxed as wages.
Section 351 ETF Conversions: Exchanging Appreciated Stock for ETF Shares
A Section 351 exchange moves a diversified basket of appreciated securities into a newly launched ETF for its shares, deferring capital gains tax, though September 2026 IRS guidance treats some versions as taxable.
Section 83(i) Elections: Deferring Tax on Private-Company Stock
Section 83(i) lets eligible private-company employees defer income tax on stock from options or RSUs for up to five years; an IPO ends the deferral.
Selling RSUs After an IPO: Withholding, Lockups, and a Sell Plan
RSUs are taxed as wages when they vest; after an IPO, a written sell plan helps manage under-withholding, lockups, and concentration.
Selling Stock From Exercised NSOs: Taxes, Timing, and a Written Plan
NSO spread is taxed as ordinary income at exercise; only later growth can get capital gains rates. A written sale plan weighs cash needs against stock risk.
Startup Stock Options: A Practical Guide for Employees
Startup options are rights to buy shares at a fixed strike price. Their value depends on vesting, taxes, exit windows, and whether the company succeeds.
Stock Options and RSUs After a Layoff: Deadlines and Decisions
After a layoff, unvested equity is usually forfeited and vested options must be exercised within a set window, often 90 days, or they expire.
The Psychology Behind Equity Decisions
Decisions about company stock are distorted by anchoring, loyalty, loss aversion, and regret; a written process with pre-set rules can help counter them.
Timing ISO Exercises Around the Alternative Minimum Tax
Exercising ISOs creates no regular income tax, but the spread counts for AMT; knowing where AMT starts helps size and time each exercise.
When Your Startup's Valuation Looks Too High: What It Means for Your Equity
If your startup's valuation looks stretched, your options may be worth far less than the headline price. The 409A, preferences, and exit path matter most.