How much equity should be in a seed-stage employee option pool?

For a seed-stage company, the employee option pool is typically 10% to 15% of the company's total shares. This pool is reserved for the first ~15-20 hires and is key to your compensation strategy.

What's the difference between stock options (ISOs) and RSUs?

Stock options give an employee the *right to buy* shares at a fixed price (the strike price), creating leverage if the company value grows. RSUs are direct grants of stock with no purchase price, typically used by large public companies and less common at the earliest stages.

Should I let candidates choose between more cash or more equity?

Yes, offering two distinct packages (e.g., a higher cash/lower equity option and a lower cash/higher equity option) can be a powerful closing tactic. It gives candidates agency and helps you understand what truly motivates them.

What is a 'post-termination exercise period' (PTEP)?

This is the window an employee has to purchase their vested options after leaving the company. While the standard is 90 days, offering a multi-year or 10-year PTEP is a massive, low-cost benefit that can be a huge selling point.

How much equity should be in a seed-stage employee option pool?

For a seed-stage company, the employee option pool is typically 10% to 15% of the company's total shares. This pool is reserved for the first ~15-20 hires and is key to your compensation strategy.

What's the difference between stock options (ISOs) and RSUs?

Stock options give an employee the *right to buy* shares at a fixed price (the strike price), creating leverage if the company value grows. RSUs are direct grants of stock with no purchase price, typically used by large public companies and less common at the earliest stages.

Should I let candidates choose between more cash or more equity?

Yes, offering two distinct packages (e.g., a higher cash/lower equity option and a lower cash/higher equity option) can be a powerful closing tactic. It gives candidates agency and helps you understand what truly motivates them.

What is a 'post-termination exercise period' (PTEP)?

This is the window an employee has to purchase their vested options after leaving the company. While the standard is 90 days, offering a multi-year or 10-year PTEP is a massive, low-cost benefit that can be a huge selling point.

Early-Stage Startup Compensation: A Founder's Guide

Don't lose top talent to big tech. A founder's playbook on using equity, salary, and benefits to craft startup compensation packages for your first 10 hires.

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Early-Stage Startup Compensation: A Founder&#39;s Guide

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Early-Stage Startup Compensation: A Founder's Guide