3 ms·
Assuming you’re in the US and it’s a fairly early stage company (one or two funding rounds), I’d look at: * Early exercise: Allowing you to exercise your optio
by molsongolden 5y ago
Assuming you’re in the US and it’s a fairly early stage company (one or two funding rounds), I’d look at:
* Early exercise: Allowing you to exercise your options immediately while the strike price == grant price (tax benefits and lower cash outlay) then vest the shares over time.
* Exercise window: Many companies only give you 90-days to use or lose your options if you leave down the road. Employee-friendly startups were giving 10-year windows for a while but these might have fallen out of vogue now.
* Restrictions on secondary sales and transfers: Ideally, they’ll have a short right of first refusal period but will allow secondary market sales before a liquidity event.
* QSBS: Maybe worth looking at whether the company will qualify at its current size but I wouldn’t worry about it too much. A nice perk if it works out.
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Whatever % you end up at, assume some additional dilution in future funding rounds. The 50% to 75% mentioned below seems aggressive but it all depends on the strength of the company.
Also make sure they don’t have some abnormal vesting schedule. Four year vest with a one-year cliff is still the most common.
Others have linked good resources and I’ll add the Holloway guide.
https://www.holloway.com/g/equity-compensation https://www.holloway.com/g/equity-compensation