Understanding Equity and Stock Options in a Job Offer

When a job offer includes equity, the number of shares or options means little without understanding the terms attached.

Key terms to ask about

Vesting schedule (commonly four years with a one-year cliff), strike price for options, the company's current valuation, and whether the company is private or public.

Why private-company equity is riskier

Private company shares typically can't be sold until an acquisition or IPO — treat equity as a possible bonus, not guaranteed income, when comparing offers.

Questions worth asking directly

What's the current 409A valuation (for US companies) or most recent funding round valuation? How many shares are outstanding? Has the company had a down round? A reasonable employer will answer these.