Employee equity

Ownership granted to employees, usually as stock options from the option pool, vesting over time.

Example

10,000 options at a $0.50 strike, vesting over four years with a one-year cliff.

Important

Always quote it as a percentage, never a bare share count, and be honest that most startups fail. Overselling equity is how you lose someone bitterly two years later.

Related terms

• Stock options — The right to buy shares later at a price fixed today (the strike price).
• Option pool — Shares set aside to grant to future employees.
• Vesting — Earning your shares over time rather than owning them all immediately.
• Strike price — The fixed price at which an option holder can buy a share.
• Equity — Ownership in the company, usually held as shares.

All 176 terms in the Founder glossary