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Compare the guaranteed package first
Write down what the offer actually guarantees and what is conditional. Include base salary, any guaranteed bonus, health coverage, retirement contributions, paid leave, stipends, location and schedule expectations, and flexibility. Also record one-time benefits separately from recurring compensation. General Assembly’s startup-offer guide recommends weighing benefits, vacation, transportation costs, flexibility, equity and company growth—not salary alone.
Compare the reliable cash and benefits with your living costs and other opportunities. A bonus that depends on company or individual performance is not guaranteed pay. Treat a promised future salary adjustment as contingent unless the employer states the amount, trigger and timing clearly in writing.
Assess the role and the company’s prospects
Ask what success in the job looks like, how it will be measured, what resources and decision-making authority you will have, and how the role contributes to the business. Clarify who you report to, how priorities are set, and what growth in responsibility might look like. Consider whether the work and manager fit your career goals, not just whether the company is growing quickly.
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Probe the company’s product, customers, competitive position, leadership and financial durability. Ask what “fast-growing” means in measurable terms and how the company is funded. Growth does not eliminate the possibility of failure. Carta notes that private-company equity can be difficult to value and that an employee may not be able to sell it unless a liquidity event occurs: Private Equity vs. Public Equity: How to Value a Job Offer. Without company-specific financial and financing information, you cannot reliably assess a particular startup’s health.
Find out what the equity grant actually is
Do not assign a value until you know the instrument and have the governing documents. The SEC distinguishes stock, options, restricted stock awards and restricted stock units. Stock represents ownership; an option is a right to buy shares at a set strike price after vesting; an RSA is stock granted subject to conditions; and an RSU is a promise to deliver shares once conditions are met. The SEC’s Common Startup Securities page, reviewed August 8, 2025, explains these distinctions.
For options, request the number of options and the number of fully diluted shares used to calculate any quoted ownership percentage. A share count or percentage alone does not reveal what you may receive: the strike price, vesting, dilution, preferred-stock rights and eventual sale terms can all matter. Ask for the equity plan and your grant agreement, not just a verbal summary or recruiting slide.
Questions to ask about an option grant
- What type of options are they—an incentive stock option or a nonstatutory option, where applicable?
- What is the strike price, and how will it be set when the grant is approved?
- When does vesting begin? Is there a cliff, how often do options vest afterward, and are there performance conditions?
- When do the options expire, and how long do you have to exercise vested options after leaving?
- Is early exercise permitted? If employment ends, what happens to unvested shares and any shares already acquired?
- What company equity-plan and grant-agreement terms apply? What information is available about the capitalization structure and preferred-stock rights that could affect proceeds for common shares?
Do not treat private-company equity as cash
A quoted grant value is not the same as money you can spend. Private-company shares generally are not traded on a public exchange. Carta identifies an IPO, tender offer or merger or acquisition as possible routes to liquidity; an employee may wait years for such an event, or none may occur. The company can also fail.
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1Clear out junk files and repair common Windows errors2Fix the driver behind crashes, sound loss and screen glitches3Repair Windows errors before they cause bigger problemsA headline company valuation or a calculation based on the latest preferred-share price does not establish what common shares will be worth or whether you can sell them. Future financing can dilute ownership, and the terms of a liquidity event can affect what different share classes receive. Compare equity using explicit assumptions—future financing and dilution, a possible exit value and timing, exercise cost, taxes, and rights affecting proceeds. No reliable probability of success or payout can be inferred without company-specific evidence.
Check vesting and what happens if you leave
Vesting determines when you earn the right to keep or exercise an award. Some schedules have an initial cliff followed by regular installments. Unvested options are generally not exercisable, and vested options can expire if you miss the applicable exercise deadline. Read the plan and grant agreement for the actual schedule and departure rules.
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Carta reports that many companies provide 90 days after employment ends to exercise vested options, while some provide longer periods; your agreement controls. Its September 1, 2026 article also reports that 28% of options that do not qualify for early exercise are exercised during the post-termination exercise period. That is a Carta-reported statistic, not a universal rate or a prediction for your grant. See Carta’s guide to exercising stock options.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Estimate exercise costs and tax consequences
If you have options, calculate the exercise price as the number of options you plan to exercise multiplied by the strike price. That is only the purchase cost; taxes may add to the cash required. Exercise can tie up money in shares you cannot sell, so consider whether you could absorb that loss or illiquidity.
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For U.S. federal tax purposes, the IRS says statutory stock options generally do not create gross income when granted or exercised, although exercising an incentive stock option may trigger alternative minimum tax. For many nonstatutory options without a readily determinable fair market value, the difference between the stock’s fair market value at exercise and the amount paid is included in income at exercise. Selling shares has separate tax consequences. The details depend on the award and your circumstances; consult IRS Topic no. 427 and seek individualized tax advice before acting. These are U.S. federal rules, not a tax calculation for your situation.
Compare offers without inflating uncertain equity
If you have more than one offer, compare them on the same dimensions rather than converting a private-company grant into annual salary. Weight the factors according to your cash needs, risk tolerance and career plans.
| Compare | What to examine |
|---|---|
| Cash | Base salary, guaranteed and discretionary bonus, and any one-time compensation |
| Benefits and work terms | Health coverage, retirement contributions, leave, flexibility, location, schedule and recurring stipends |
| Role and development | Scope, manager, resources, decision rights, learning, career path and meaningful work |
| Company and execution | Product and customer prospects, financial durability, leadership, and the role’s importance to business goals |
| Equity terms | Instrument, share count and ownership context, vesting, strike price, expiration and post-termination exercise window |
| Liquidity and downside | Potential path and timing to a sale, possible dilution, exercise and tax funding needs, and ability to bear a loss |
For a specific offer, the documents and facts that matter include the offer letter, equity plan and grant agreement, company capitalization and financing information, your jurisdiction and personal tax circumstances. Without them, a grant cannot be valued precisely and an individual company’s prospects cannot be judged. Consider an employment or tax professional for questions that depend on contract language or your situation.
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