Understanding Equity Types

Stock options require purchasing shares at predetermined strike price Stock units (RSUs) grant shares directly without purchase requirement Each equity type has different tax treatments and implications Earlier stage companies typically offer options, later stages offer RSUs

Critical Timing Considerations

Vesting schedule determines when options become available to purchase Exercise window typically lasts seven to ten years while employed Post-termination window often only 90 days to exercise options Early exercising may reduce taxes but requires 83(b) election filing

Method 1: Predict future share price times number of options Method 2: Estimate company valuation times ownership percentage Consider industry growth, competition, and company revenue trajectory Account for dilution from future funding rounds reducing ownership

Use data to support salary and equity increase requests Remember companies have invested heavily in hiring process already Consider total compensation package beyond just equity components Document personal career goals before starting new position

Collect detailed equity information before accepting any tech offer Understand your specific equity type and associated tax implications Calculate potential value using company valuation and ownership percentage Negotiate confidently using industry data and company investment context

Equity in Your Tech Job Offer

Curated by: Rubric Advisors

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Information Collection Essentials

Request equity type details before accepting any tech job offer
Ask for strike price and latest 409A valuation timing information
Clarify number of options, vesting schedule, and exercise window terms
Obtain fully diluted shares outstanding to calculate ownership percentage

Options Overlay Direct Indexing

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Information Collection Essentials

Understanding Equity Types

Critical Timing Considerations

Valuation Methods

Negotiation Strategy

Key Takeaways

Related Topics

Should You Early Exercise Your Stock Options?

What to Do at an Overvalued Startup

A Framework for Exercising Stock Options

Information Collection Essentials

Understanding Equity Types

Critical Timing Considerations

Valuation Methods

Negotiation Strategy

Key Takeaways

Related Topics

Should You Early Exercise Your Stock Options?

What to Do at an Overvalued Startup

A Framework for Exercising Stock Options