startups, Stock Options, Restricted stock units, How to negotiate equity in a startup, How much equity should I ask for? Mary Russell startups, Stock Options, Restricted stock units, How to negotiate equity in a startup, How much equity should I ask for? Mary Russell

Startup Compensation Data Sources

Here’s some links to helpful market data for startup equity offers. Individuals negotiating a startup offer often struggle to find good resources for startup compensation data since the key data sources are only available on the company side.

Negotiating startup salary and stock options or RSUs? These are links to market data that readers have found helpful.

Negotiating startup salary and stock options or RSUs? These are links to market data that readers have found helpful. Photo by ThisIsEngineering.

Attorney Mary Russell counsels individuals on startup equity, including:

You are welcome to contact her at (650) 326-3412 or at info@stockoptioncounsel.com.

Published February 2023. Updated regularly.

Market Data Sources

Individuals often struggle to find good resources for startup compensation data since subscriptions to the primary startup compensation data sources are only available on the company side. Companies are using Radford, Mercer, Carta (but see below re Friends of Carta!) and Pave (including the classic Advanced-HR Venture Capital Executive Compensation Survey, now owned by Pave). The imbalance is challenging to say the least.

Here’s some links that readers have found helpful:

Good luck! Please send along anything you’d like me to include on this list.

How to Use Market Data

And here’s some good links on how to use market data. They are written for companies, but helpful to any individual’s thoughtful approach to this topic.

Attorney Mary Russell counsels individuals on startup equity, including:

You are welcome to contact her at (650) 326-3412 or at info@stockoptioncounsel.com.

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VIDEO Startup Stock Options: Negotiate the Right Startup Stock Option Offer

Attorney Mary Russell counsels individuals on startup equity, including:

You are welcome to contact her at (650) 326-3412 or at info@stockoptioncounsel.com.

 

Attorney Mary Russell counsels individuals on startup equity, including:

You are welcome to contact her at (650) 326-3412 or at info@stockoptioncounsel.com.

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Startup Negotiations: How Preferred Stock Makes Employee Stock Less Valuable

Originally published February 13, 2014. Updated August 30, 2023.

Attorney Mary Russell counsels individuals on startup equity, including:

You are welcome to contact her at (650) 326-3412 or at info@stockoptioncounsel.com.

Common Stock v. Preferred Stock

Startup employees and executives get Common Stock (as options, RSUs or restricted stock). When venture capitalists invest in startups, they receive Preferred Stock.

Preferred Stock comes with the right to preferential treatment in merger payouts, voting rights, and dividends. If the company / founders have caved and given venture capitalists a lot of preferred rights - like a 3X Liquidation Preference or Participating Preferred Stock , those rights will dramatically reduce the payouts to Common Stock in an acquisition. An individual who holds 1% in common stock would be curious, therefore, about the preferred stock’s rights to know if their 1% would really be 1% in an acquisition.

Is Preferred Stock Negotiable for Employees and Executives?

No. Preferred Stock is not negotiable for employees and executives (other than perhaps founders preferred stock which relates not to acquisition payout amounts but to liquidity rights and voting rights). The key is to understand if the investors’ Preferred Stock has unusual, off-market liquidation preferences. If so, that would weigh in favor of negotiating for more shares, more cash compensation or - less often but occasionally - management retention plan terms to make up for uninspiring Common Stock rights.

Liquidation Preference & How It Affects Common Stock Payouts

One Preferred Stock right is a "Liquidation Preference." Without a Liquidation Preference, each stockholder – preferred or common – would receive a percentage of the acquisition price equal to the stockholder's percentage ownership in the company. If the company were acquired for $15 million, and an employee owned 1% of the company, the employee would be paid out $150,000.

With a Liquidation Preference, preferred stockholders are guaranteed to be paid a set dollar amount of the acquisition price, even if that guaranteed payout is greater than their percentage ownership in the company.

Here’s an example of the difference. An investor buys 5 million shares of Preferred Stock for $1 per share for a total of $5 million. After the financing, there are 20 million shares of common stock and 5 million shares of Preferred Stock outstanding. The company is then acquired for $15 million.                                                                                                                           

Without a Liquidation Preference, each stockholder (common or preferred) would receive $0.60 per share. That’s $15 million / 25 million shares. A hypothetical employee who held 1% of the company or 250000 shares) would receive $150,000 (that’s 1% of $15 million).

If the preferred stockholders had a 1X Liquidation Preference and Non-Participating Preferred Stock, they would receive 1X their investment ($5 million) before any Common Stock is paid in an acquisition. They would receive the first $5 million of the acquisition price, and the remaining $10 million would be divided among the 20 million shares of common stock outstanding ($10 million / 20 million shares of common stock). Each common stockholder would be paid $0.50 per share, and hypothetical employee who held 1% of the company would receive $125,000.

In an up-round acquisition, though, this 1X non-participating preference would not affect common stock payouts. In an acquisition at $100 million valuation, the investors would choose the higher of:

  • Their $5M liquidation preference and

  • Their percentage of the company valuation. If they had 20% of the company’s shares, they would of course here choose $20M in payouts. And all common stockholders would also receive their percentage payout.

Ugly, Non-Standard Rights That Diminish Employee Stock Value

The standard Liquidation Preference is 1X. This makes sense, as the investors expect to receive their investment dollars back before employees and founders are rewarded for creating value. But some company founders give preferred stockholders multiple Liquidation Preferences or Participation Rights that cut more dramatically into employee stock payouts in an acquisition.

If preferred stockholders had a 3X Liquidation Preference, they would be paid 3X their original investment before common stock was paid out. In this example, preferred would be paid 3X their $5 million investment for a total of $15 million, and the common stockholders would receive $0. ($15 million acquisition price – $15 million Liquidation Preference = $0 paid to common stockholders)

Preferred stock may also have "Participation Rights," which would change our first example above to give preferred stockholders an even larger portion of the acquisition price.

Without Participation Rights, Preferred Stockholders must choose to either receive their Liquidation Preference or participate in the division of the full acquisition price among the all stockholders. In the first example above, the preferred stockholders held 20% of the company and had a $5 million Liquidation Preference. When the company was acquired for $15 million, the preferred stockholders had the choice to receive their $5 million liquidation preference or to participate in an equal distribution of the proceeds to all stockholders. The equal distribution would have given them $3 million (20% of $15 million acquisition price), so they chose to take their $5 million liquidation preference, and the remaining $10 million was divided among 20 million shares of common stock.

If the Preferred Stock also had Participation Rights, (which is called Participating Preferred Stock), they would receive their Liquidation Preference and participate in the distribution of the remaining proceeds.

In our example with a 1X Liquidation Preference but adding a Participation Right, the Participating Preferred Stock would receive their $5 million Liquidation Preference AND a portion of the remaining $10 million of the acquisition price equal to their % ownership in the company.

$5 million Liquidation Preference + ((5 million shares / 25 million shares outstanding) * $10 million) = $7 million

Common stockholders would receive (20 million shares common stock / 25 million shares outstanding) * $10 million = $8 million.

Our hypothetical employee who held 1% of the company would receive $100,000 (.01 * $10 million) or 0.67% of the acquisition price.

Employee Focus – Quick and Dirty Analysis

These calculations are complicated, so most candidates who are evaluating a startup job offer keep it simple in considering the effects of preferred stock. The quick and dirty way to know if preferred stock is an issue in evaluating an equity offer is to find out:

Do preferred stock investors have any liquidation preferences beyond the standard 1X non-participating preference?

If not, it’s not an issue in any up-round acquisition (and so most startup hires would not be concerned about the preferences at hire).

Founder Focus – Negotiating Your Acquisition Payout

If you are a founder and are negotiating with an acquiror, consider renegotiating your investors’ Liquidation Preference payout. Everything is negotiable in an acquisition, including the division of the acquisition price among founders, investors and employees. Do not get pushed around by your investors here, as their rights in the documents do not have to determine their payout.

If your investors are pushing to receive the full Liquidation Preference and leaving you and/or your employees with a small cut of the payout, address this with your investment bankers. They may be able to help you play your acquiror against the investors so that you are not cut out of the wealth of the deal, as most acquirors want the founders and employees to receive enough of the acquisition price to inspire them to stay with the company after acquisition.

Attorney Mary Russell counsels individuals on startup equity, including:

You are welcome to contact her at (650) 326-3412 or at info@stockoptioncounsel.com.

Thanks to investment banker Michael Barker for his comments on founder merger negotiations. Michael is a Managing Director at Shea & Company, LLC,  a technology-focused investment bank and leading strategic advisor to the software industry.

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Double Trigger Acceleration and Other Change of Control Terms for Startup Stock, Options and RSUs

Startup Equity | Double Trigger Acceleration | Change of Control Terms for Startup Stock, Options and RSUs

What does double trigger acceleration mean? It protects unvested shares from cancellation in a change of control by immediately accelerating those shares if the individual is terminated as part of the change of control. Founders, executives and key hires, including employee-level hires at early stage startups, negotiate for Double Trigger Acceleration in their equity grant documents at the offer letter stage.

Attorney Mary Russell counsels individuals on startup equity, including:

You are welcome to contact her at (650) 326-3412 or at info@stockoptioncounsel.com.

Originally published June 5, 2018. Updated July 27, 2023.

Change of Control Terms for Startup Stock, Options and RSUs

Startup stock, options and RSUs vest over time. Since they vest over time, some may not be vested when the company has a change of control (aka merger or acquisition). What happens to the unvested shares at change of control? It depends on the fine print in your equity documents.

Founders, executives and key hires, including employee-level hires at early stage startups, often negotiate for Double Trigger Acceleration to protect their unvested shares. Advisors and some founders and rare executives may negotiate for Single Trigger Acceleration so that their shares immediately vest at acquisition. However, these protections are not often negotiable for employee-level hires except at very early stage companies. Their equity will be governed by the general terms of the Plan, which will likely be either an unfavorable Cancellation Plan.

Single Trigger Acceleration

The ideal change of control acceleration term is Single Trigger Acceleration - so that 100% of unvested shares vest immediately upon change of control. Investors and companies often argue against this term because the company may be an unappealing acquisition target if its key talent will not be incentivized to stay after closing. This is especially true for technical talent at a technology company.

Advisors, some founders and rare executives may negotiate for Single Trigger Acceleration if they can make the case that their role will not be needed after change of control. For example, advisors naturally negotiate for Single Trigger Acceleration because their primary role is to advise a company at the startup stage. They would not be necessary after an acquisition as they’ve fulfilled their purpose by that time. Founders and executives sometimes argue for Single Trigger Acceleration based on aligning incentives. For example, I’ve worked with a CFO who negotiated for 50% Single Trigger Acceleration because he was hired with the express purpose of improving the company’s financial position to achieve an acquisition. Those with similar arguments may even negotiate for Single Trigger Acceleration to apply at IPO, which would be a very unusual term but a logical incentive for certain hires.

Double Trigger Acceleration

The next best term is Double Trigger Acceleration, in which unvested equity immediately vests if both of two triggers are met. First, the company closes a change of control. Second, the individual’s service is terminated for certain reasons (most often a terminated by the company without Cause or a voluntary resignation by the individual for Good Reason).

Founders, executives and key hires, including employee-level hires at early stage startups, negotiate for Double Trigger Acceleration in their equity grant documents at the offer letter stage.

The key argument for Double Trigger Acceleration is based on risk. If an individual at any level of the organization is taking a significant risk to join the company, such as sacrificing significant cash or other compensation elsewhere to join, they advocate for Double Trigger Acceleration to protect their upside in the event that the equity becomes valuable. A grant of 1% with Double Trigger Acceleration is more valuable because of that protection of the upside. A second key argument for this term is based on “aligning incentives.” If individuals on the team could lose valuable unvested equity by achieving a prompt acquisition, their incentives would not be aligned with the company’s goals of closing that deal. Double Trigger Acceleration rights bring the individuals' incentives in alignment with the company's goals.

This Double Trigger Acceleration protection is negotiated at the offer letter stage and included in the final equity grant documents.  The key negotiable terms in this clause are:

  1. Full acceleration so that a qualifying termination at any time after acquisition accelerates 100% of unvested shares;

  2. Application to a qualifying termination in anticipation of, or for a certain protective period of time prior to, change of control;

  3. Application to terminated by the company for Cause (narrowly defined, not to include arguable performance terms);

  4. Application to a resignation by the individual for Good Reason (defined broadly to include a change in cash compensation, a reduction in duties or reporting structure, a geographic change, and anything else that would amount to constructive termination for the individual);

  5. A broad definition of change of control including a sale of substantially all the company’s assets;

  6. Immediate vesting at closing of the change of control if unvested shares would otherwise be cancelled without payment under a Cancellation Plan term. More on this here from Cooley:

Often overlooked, however, is that in order for double-trigger acceleration to be meaningful, the option grant or equity award must actually be assumed or continued by the acquiror in the transaction. This will not always be the case in a transaction – aquirors often have their own plans and ideas for incentivizing their employees. If an unvested option or equity award terminates in connection with a transaction, then technically, there will be no unvested options or awards to accelerate if the second trigger (i.e., the qualifying termination) occurs after the transaction.

Continuation Plan

If the startup’s Equity Incentive Plan includes a continuation term, the value of the unvested shares continue to vest after change of control so long as the individual stays in service after the closing. We’ll call this style of plan a Continuation Plan. The unvested shares are likely to be converted into another form, such as RSUs in the acquiring company or cash deal consideration. But the value is protected so that the deal value per share paid to vested shares at closing will be paid to these unvested shares on each subsequent vesting date. If the individual is terminated or resigns for any reason, they would not be paid out. If the deal does not provide for such continuation or substitution, unvested equity will be accelerated so that it becomes 100% vested and paid at closing.

If an employee's total number of shares was worth $200,000 at the acquisition price, and only 50% had vested at the acquisition, the employee would be paid $100,000 at closing. But the unvested shares would be replaced with a substitution or continuation award in exchange for the $100,000 in unvested value. That might be in the form of cash to vest over time, continuing awards in the original company, or new equity in the acquiring company's equity. Whatever the form, it would continue to vest over the remaining portion of the original vesting schedule.

Without the Double or Single Trigger Acceleration protections described below, the individual could be terminated for any reason, at any time, and would lose the unvested shares.  However, those who stay at the acquiring company under a Continuation Plan will continue to earn the deal consideration for their unvested shares. (But beware. Those with unvested equity under a Continuation Plan may also be asked to sign new employment agreements forfeiting these rights as part of the acquisition, since the company’s leverage of termination is significant).

Cancellation Plan

Most startup Equity Incentive Plans allow the company to cancel unvested shares without payment in an acquisition. We’ll call this type of plan a Cancellation Plan. Under a Cancellation Plan, unvested equity can be cancelled and replaced with $0, even if the unvested shares had significant value at the time of the acquisition. For example, if an employee's total number of shares was worth $200,000 at the acquisition price, and only 50% had vested at the acquisition, the employee would be paid $100,000 at closing. The unvested value of $100,000 could be cancelled without payment even if the employee stayed on as an employee after the acquisition. In another example, if the employee was within the first year of service and had a one-year cliff vesting schedule, 100% of the grant could be cancelled without payment even if it was immensely valuable based on the deal price/share.

The distinction between a Cancellation Plan and the more protective Continuation Plan is not usually a negotiable term. The exception to this would be at a startup with employee-friendly founders and executives who are willing to advocate for changes to their Plan with the board and stockholders. When startup candidates encounter this term in their offer negotiation document review, their best course of action is likely to be to negotiate for Single Trigger Acceleration or Double Trigger Acceleration for their individual grants.

Negotiating Change of Control Terms

The availability of Single Trigger Protection or Double Trigger Protection and/or the distinction between a Cancellation Plan and a Continuation Plan is a factor in assessing the risk of joining a startup. If the fine print protects 100% of the unvested shares, the shares have a higher potential upside for the employee or executive. Without these protections, it may make sense to negotiate for a higher cash package or a higher number of shares to balance risk. Check out more on my blog about market data for startup equity offers and other key terms that affect the risk of startup equity including clawbacks and tax planning for stock options.


Attorney Mary Russell counsels individuals on startup equity, including:

You are welcome to contact her at (650) 326-3412 or at info@stockoptioncounsel.com.

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RSUs - Restricted Stock Units - Evaluating an RSU Offer at a Startup

Working for a startup? Here’s how to think about Restricted Stock Units or RSUs.

Originally published February 10, 2014. Updated March 27, 2017 and July 5, 2023.

Attorney Mary Russell counsels individuals on startup equity, including:

You are welcome to contact her at (650) 326-3412 or at info@stockoptioncounsel.com.

Working for a startup? Here’s how to think about RSUs.

What are RSUs?

Restricted Stock Units ("RSUs") are not stock. They are not restricted stock. They are not stock options. RSUs are a company's promise to give you shares of the company's stock (or the cash value of the company's stock) at some time in the future.

How Many Shares Do I Have?

One RSU is equivalent to one share of stock. The number of RSUs in your grant determines how many shares of stock (or the number of shares of stock used to determine your cash payment) you will receive when they are "settled" on the Settlement Date.

You’ll receive one share of stock (or the cash value of one share of stock) for every vested RSU on the Settlement Date. For startup (private company) RSUs, the Settlement Date is usually a company Liquidity Event. A company Liquidity Event might include (i) a Change of Control (aka Merger or Acquisition); (ii) after an IPO, when post-IPO lockup on employee sales expires or (iii) a company choice to have an early settlement in shares.

When are Startup RSUs Taxed?

Most startup RSUs are structured elegantly to defer taxes until after the shares can be sold to cover the taxes. That’s achieved with a two-tier vesting schedule. Before the RSUs fully vest (so they can be “settled” in shares or cash on the Settlement Date), two triggers must be met:

  1. Time-Based Vesting AND

  2. Liquidity-Event-Based Vesting

Time-based vesting is the classic vesting concept. You will meet the time-based vesting requirement over a set period of time of service (called the "Vesting Period"). The most common time- vesting period is quarterly vesting over four years with a 1-year cliff.

The liquidity-event vesting requirement is the tax-deferral concept. The shares will not be settled / fully vested for tax purposes until the company has a Liquidity Event. A company Liquidity Event might include (i) a Change of Control (aka Merger or Acquisition); (ii) after an IPO, when post-IPO lockup on employee sales expires or (iii) a company choice to have an early settlement in shares.

Without this liquidity-event vesting requirement, RSUs could become vested for tax purposes before there is a market to sell the shares (or even before shares are officially received in exchange for the RSUs at settlement). That would be very unappealing for startup employees and executives, as they would need to pay taxes out of their own funds based on the FMV on the vesting date.

[Careful! This two-tier vesting structure (sometimes called double trigger vesting) is a tax deferral mechanism. It is not the same thing as double trigger acceleration upon change of control! Those are often confused so be careful there.]

Do Startup RSUs Expire?

Yes! There’s two issues to watch out for w/r/t expiration / forfeiture of startup RSUs.

All startup RSUs include a deadline, so that if the Liquidity Event is not achieved by a certain date, all RSUs will be forfeited without payment. That is usually 5 or 7 years from the date of grant. Therefore, most RSUs are designed to be forfeited if the company does not go public or get acquired within 5 or 7 years of the employee or executive’s start date even if the RSUs have already time-vested by that date. Unfortunately, this term is not negotiable as it is a tax-driven deadline. The RSUs must be designed with a substantial risk of forfeiture in order to defer taxation.

In addition to this tax-driven deadline, some RSUs include a forfeiture clause. This is similar to the dreaded clawback for vested shares, even though it is technically part of the vesting schedule. Here’s how it works. If an employee or executive leaves the company, they forfeit any time-vested RSUs that have not yet been settled / vested at a Liquidity Event. In other words, the employee or executive has to survive all the way through a Liquidity Event to get anything for their time-vested RSUs. This type of forfeiture term greatly reduces the value of an RSU grant because it is not really "earned" even after the time-based vesting period.

Will I Receive Annual Refresh Grants of Startup RSUs?

Probably not! Most private companies do not make substantial refresh grants either annually or at the time of future financings. In my experience, approximately 90% of the equity individuals receive at startups is in their original, at-hire grant. This likely would be refreshed only after it is close to meeting its full time-vesting requirements.

This is usually a surprise to employees and executives coming from public companies, where regular refreshes are the norm. The reason for the difference is that startups are hoping for huge increases in valuation. If that happens, the original grant would be sufficiently valuable to retain employees and executives. If you are evaluating a job offer, there is a big difference in the value of your offer between a company that grants RSUs only at hire (and after they have vested) and a company that plans to make additional refresh grants regularly.

How Do I Value Startup RSUs?

There is no precise "value" for startup RSUs since they are not liquid (aka easily sold). But employees and executives who are evaluating startup RSUs offers do think about value when their considering how much equity makes sense for their role.

When evaluating the number of RSUs in an RSU grant, employees and executives use one or both of these approaches:

  1. Current Valuation Method (Fact-Based): For startup stock, most hires use the price per share paid by venture capitalists for one share of preferred stock in the most recent financing as a proxy for the value of their RSUs. This is the closest number you can find for today's value. It tells you that X Venture Capitalist paid $Y for one share of the company's stock on Z date. The usefulness of this approach is somewhat limited for stale valuations, especially in the 2022-2023 market. For more on this approach, see Venture Hacks' post on startup job offers.

  2. Percentage Ownership: Executive hires also consider their percentage ownership compared to market for their role at this stage of company. Individuals often struggle to find good resources for startup compensation data since subscriptions to the primary startup compensation data sources are only available on the company side. Here’s a blog post with publicly-available startup compensation data links that readers have found helpful.

  3. Future Valuation Method (Guesstimate Based): To look forward and define a future payout for your RSUs, you have to do some guesswork. If you could guess the startup's value at exit and dilution prior to exit, you would know how much the stock will be worth when you receive it at settlement/post-IPO. Be careful, though, not to use price/share in isolation as stock splits would affect that in unpredictable ways.

Employees and executives often consider these facts to build those approaches of analysis:

  • Recent VC price per share of preferred stock

  • Current number of fully diluted shares in the company or the offered percentage ownership in the company

  • Possibilities around expected dilution, exit scenarios, exit timing and future valuation?

Need More Info?

Attorney Mary Russell counsels individuals on startup equity, including:

You are welcome to contact her at (650) 326-3412 or at info@stockoptioncounsel.com.

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startups, Stock Options, Restricted stock units, negotiation, How much equity should I ask for?, How to negotiate equity in a startup Mary Russell startups, Stock Options, Restricted stock units, negotiation, How much equity should I ask for?, How to negotiate equity in a startup Mary Russell

VIDEO Startup Stock Options: Startup Valuation

Attorney Mary Russell counsels individuals on startup equity, including:

You are welcome to contact her at (650) 326-3412 or at info@stockoptioncounsel.com.

Startup valuation basics

Attorney Mary Russell counsels individuals on startup equity, including:

You are welcome to contact her at (650) 326-3412 or at info@stockoptioncounsel.com.

Read More
Stock Options, startups, How much equity should I ask for?, How to negotiate equity in a startup, Restricted stock units Mary Russell Stock Options, startups, How much equity should I ask for?, How to negotiate equity in a startup, Restricted stock units Mary Russell

Startup Stock Options | Post Termination Exercise Period | Examples of Good Startup Equity Design by Company Stage

Attorney Mary Russell counsels individuals on startup equity, including:

You are welcome to contact her at (650) 326-3412 or at info@stockoptioncounsel.com.

Originally published August 11, 2017. Updated March 17, 2023.

It’s helpful for startup employees to understand early expiration of stock options and the  possible solution of a full 10 year post-termination exercise period. But the full 10 year term stock option is not the right design for every startup equity grant! In some cases it would be the wrong ask, and pushing for it can can lead to embarrassment or a disadvantageous design.

Examples of Good Startup Equity Design by Company Stage

I work with individual clients to balance their priorities for investment timing, tax timing, tax rates and value structure. These are some examples of how the trade-offs are made at each stage. You can also read more about option exercise strategies here in the Menu of Stock Option Exercise Strategies.

1. Earliest Stage - Startup Restricted Stock Purchase

While a startup is in its early stages and its Fair Market Value (FMV) is quite low, consider purchase of Restricted Stock for founders and early employees.  This is the model used for Founders’ Stock at startups, and it is also ideal for executives and employees who are willing to pay the FMV of the common stock up-front for their shares. With the use of an 83(b) election with the IRS, Restricted Stock purchase provides for tax deferral until sale of stock, favorable capital gains tax rates at sale of stock, and fewer tax penalties than stock options in the event the IRS determines the FMV was underpriced for the shares.

2. Early to Mid-Stage - Early Exercise of Startup Stock Options

For those who are willing to take early investment risks for tax deferral and lower tax rates, consider early exercise of stock options. This is an obvious choice for early-stage startup hires who can afford the stock purchase price at hire. For example, at a very early stage startup an employee’s total exercise price might be less than $1,000. Early exercise may also be a good choice for some individuals at mid-stage startups with somewhat higher exercise prices or even later stage startups with high growth potential, as an early investment may be worth it for future tax savings and/or tax deferral.

Early exercise stock options can be exercised before vesting. If they are exercised before the FMV rises above the exercise price, tax payments are deferred until sale of stock by use of a Section 83(b) election at the time of purchase.

However, the investment risk is real, as the purchase price is delivered up-front and shares are held as an investment. If the shares were to become worthless, the investment amount would be lost for both vested and unvested shares.

Early exercise stock options are preferable to restricted stock if the employee is not sure about making the investment up-front. Unlike the purchase of restricted stock, the choice to exercise stock options (even with early exercise rights) can be deferred for some time. However, if the exercise or early exercise is made after the FMV has gone up, the exercise will lead to taxable income.

The early exercise structure can be combined with an extended exercise period (see below under #3 or more here on the blog), so that the employee has the choice between early exercising to minimize tax rates or deferring exercise until any time within the full 10 year term.

Note that the right to early exercise can be a disadvantage for stock option grants with an exercise price greater than $100,000 if they are not early exercised. Any amounts over $100,000 would be ineligible for ISO status due to the ISO rules’ $100,000 limitation.

3.  Early to Mid-Stage - Stock Options with Full 10-Year Exercise Period

While there is still potential for high growth in value, stock options are an advantage for employees. However, a high exercise price or a high tax bill at exercise can make it impossible for employees to take advantage of the value of stock options. This is because stock options have traditionally been granted with a disadvantageous early expiration term requiring exercise within three months of an optionee’s termination date. Therefore, stock options are most advantageous where they are granted with a full 10 year term to exercise regardless of the date of termination. This allows the optionee to defer the investment decision and the associated tax bill for exercise.

Additional consideration: Optionees who take advantage of an extended exercise period (exercise their options after 90 days from last employment) lose their Incentive Stock Option (ISO) tax treatment.  Shares exercised after 90 days from last employment will be treated as Non-Qualified Stock Options (NQSOs) and generally come with a higher tax rate.  However, with this extended exercise design, optionees can choose to exercise within 90 days and keep their ISO classification, or wait to exercise and accept the NQSO classification. This flexibility is key in rewarding optionees of all types and financial circumstance.   

4. Later Stage - Restricted Stock Units

Employees may prefer RSUs to stock options at later stage companies for both tax deferral and offer value purposes. Well-designed RSUs defer taxes until liquidity so long as it is within a certain time frame (such as 7 years from the date of grant). RSUs are less advantageous for tax rates, though, as the value of the shares is taxed as ordinary income at settlement. RSUs are advantageous from an investment perspective because there is no investment risk as there would be in a stock option exercise prior to liquidity.  RSUs also give the employee the full value of the shares at liquidity as there is no purchase price to pay for the stock as there would be with a stock option exercise price. For this reason, a grant of RSUs generally consists of fewer shares than a grant of stock options at a company of the same stage.

Wrapping Up

This is Part 3 of a 3-part series on the startup scene’s debate about early expiration stock options. See Early Expiration of Startup Stock Options - Part 1 - The $1 Million Problem for more information on the issue and Early Expiration of Startup Stock Options - Part 2 - The Full 10-Year Term Solution for more information on the full 10-year term solution.

Thank you to attorney Augie Rakow, a partner at Orrick who advises startups and investors, for sharing his creative solution to this problem in Early Expiration of Startup Stock Options - Part 2 - The Full 10-Year Term Solution.

Thank you to JD McCullough for edits to this post. JD is a health tech entrepreneur, interested in connecting and improving businesses, products, and people.

Attorney Mary Russell counsels individuals on startup equity, including:

You are welcome to contact her at (650) 326-3412 or at info@stockoptioncounsel.com.

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Part 2 - Examples of a Clawback Clause for Startup Stock

Working for a startup? Learn how a clawback clause, forfeiture term or repurchase right limits the value of startup equity. Plan ahead to protect your equity stake.

Attorney Mary Russell counsels individuals on startup equity, including:

You are welcome to contact her at (650) 326-3412 or at info@stockoptioncounsel.com.

What is a Clawback Clause?

Startup hires expect that they will be able to keep their vested shares if they leave the company before an exit event. That’s not always the case. Learn more in Part 1 of this series - Clawbacks for Startup Stock - Can I Keep What I Think I Own - about how a clawback clause limits the value of startup equity.

In this post, we will share some examples of a clawback clauses or clawback provision that would allow startups to take back vested shares or options.

What is an Example of a Clawback Clause?

Equity Incentive Plan I

The company reserves the right to include clawbacks for vested shares upon an individual's termination of employment:

Repurchase Right. The Company (and other designated Persons) may repurchase any or all of the shares of Stock granted to a Participant pursuant to an Award or acquired by the Participant pursuant to the exercise of a Stock Option upon such Participant’s termination of employment with, or Service to, the Company for any reason to the extent such a right is provided in an Award Agreement or other applicable agreement between the Company and the Participant.

Such terms could be included in any agreement with the individual, such as a Stock Option Grant Notice, a Stock Option Agreement, a Stock Option Exercise Agreement, a Termination and Release or Severance Agreement, a Restricted Stock Agreement, an RSU Agreement, an Employment or IP Agreement, or a Stockholders' Agreement.

Equity Incentive Plan II

The company reserves the right to implement a policy in the future to clawback vested or unvested shares, and you’re agreeing that such a change will apply retroactively to your shares:

Clawback Policy.  The Awards granted under this Plan are subject to the terms of the Corporation’s recoupment, clawback or similar policy as it may be in effect from time to time, as well as any similar provisions of applicable law, any of which could in certain circumstances require repayment or forfeiture of Awards or any shares of Common Stock or other cash or property received with respect to the Awards (including any value received from a disposition of the shares acquired upon payment of the Awards).

Stock Option Agreement

The company reserves the right to change its bylaws in the future to clawback vested or unvested shares, and you’re agreeing that such a change will apply retroactively to your shares:

Right of Repurchase. To the extent provided in the Company’s bylaws in effect at such time the Company elects to exercise its right, the Company will have the right to repurchase all or any part of the shares of Common Stock you acquire pursuant to the exercise of your option.

These two terms allowing retroactive changes push the limits of Delaware law on company repurchase rights. However, I advise my clients to negotiate these out of their documents before joining a company to avoid litigation at a later date.

Restricted Stock Unit Grant Notice

In order to vest RSUs, the time-based vesting requirement (the "Time Condition") must be met, and the Company must have an IPO or a Change of Control (the "Performance Vesting") prior to the 7 year expiration period of the RSU.  This is a normal structure for a startup RSU grant due to tax planning. However, in this example, if the IPO or Change of Control does not occur by the individual's last date of employment, the RSUs are cancelled and never vest:

Vesting Conditions. Any Restricted Stock Units that have satisfied the Time Condition as of such date shall remain subject to the Performance Vesting set forth in Section 2(b) above, but shall expire and be of no further force or effect on the first to occur of (a) the date on which the Grantee’s Service Relationship with the Company terminates, or (b) the Expiration Date.

Employment and Confidentiality Agreement

The company reserves the right to terminate vested options in the event of a breach of the agreement:

Breach of Confidentiality Agreement. If the Optionee breaches the provisions of the Confidentiality Agreement, then any outstanding Options held by such Optionee at the actual time of such termination shall thereupon expire, terminate and be cancelled in respect of all vested and unvested Option Shares.

Breach of Non-Competition and Non-Solicitation Covenant. If the Optionee breaches the Non-Competition and Non-Solicitation Agreement, then any outstanding Options held by such Optionee at the actual time of such termination shall thereupon expire, terminate and be cancelled in respect of all vested or unvested Option Shares.

While these two examples from employment and confidentiality agreements apply to restrictions on exercising options, similar terms may also apply to repurchase or forfeiture of vested shares for violations of such agreements even after termination of employment. More on this here from the National Association of Stock Plan Professionals in June 2023.

Other Clawback Clauses

These are only a few examples of how clawbacks might appear in an equity offer. There are more ways they can appear in the fine print. And, practically, an option exercise deadline acts as a clawback as well. Having only 3 months to exercise options is a standard market term, but it often acts to prevent employees and executives from exercising their vested shares. More on this in:

Attorney Mary Russell counsels individuals on startup equity, including:

You are welcome to contact her at (650) 326-3412 or at info@stockoptioncounsel.com.

Thank you!

Thank you to JD McCullough for editing this post. He is a health tech entrepreneur, interested in connecting and improving businesses, products, and people.

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Clawback Clause for Startup Stock - Can I Keep What I think I Own?

Attorney Mary Russell counsels individuals on startup equity, including:

You are welcome to contact her at (650) 326-3412 or at info@stockoptioncounsel.com.

Updated October 19, 2020 for a recent clawback event in the news.

Everyone loves a gold rush story about startup hires making millions on startup equity. But not all startup equity is created equal. If a startup adds a repurchase rights for vested shares (a.k.a. a clawback clause or clawback provision) to its agreements, individuals may lose the value of their vested equity because a company can force them to sell their shares back to the company in certain situations, such as if they leave their jobs or are fired prior to IPO or acquisition. Other examples of a clawback clause are forfeiture (rather than repurchase) of vested shares or options at termination of employment or for violation of IP agreements or non-competes.

Working for a Startup? | Clawback Clause, Forfeiture Term & Repurchase Right | Protect Your Equity Stake

Image from Babak Nivi of Venture Hacks, who warns startup founders and hires to “run screaming from” startup offers with a clawback clause for vested shares: “Founders and employees should not agree to this provision under any circumstances. Read your option plan carefully.”

How a Clawback Clause Limits Startup Equity Value

In a true startup equity plan, executives and employees earn shares, which they continue to own when they leave the company. There are special rules about vesting and requirements for exercising options, but once the shares are earned (and options exercised), these stockholders have true ownership rights.

But for startups with a clawback clause, individuals earn shares they don’t really own. In the case of repurchase rights for vested shares, the company can purchase the shares upon certain events, most commonly after the individual leaves or is terminated by the company. If the individual is still at the company at the time of an IPO or acquisition, they get the full value of the shares. If not, the company can buy back the shares at a discounted price, called the “fair market value” of the common stock (“FMV”) on the date of termination of employment or other triggering event.

Most hires do not know about the clawback clause when they negotiate an offer, join a company or exercise their stock options. This means they are earning equity and purchasing shares but do not have a true sense of its value or their ownership rights (or lack thereof).

Clawback Clause “Horrible” for Employees -  Sam Altman of Y Combinator

In some cases a stockholder would be happy to sell their shares back to the company. But repurchase rights are not designed with the individual’s interests in mind. They allow the company to buy the shares back against the stockholder’s will and at a discounted price per share known as the “fair market value” or “FMV” of the common stock. As Sam Altman (now CEO of OpenAI) wrote when he was the head of Y Combinator, “It’s fine if the company wants to offer to repurchase the shares, but it’s horrible for the company to be able to demand this.”

The FMV paid by the company for the shares is not the true value for two reasons. First, the true value of common stock is close to the preferred stock price per share (the price that is paid by investors for stock and which is used to define the valuation of the startup), but the buyback FMV is far lower than this valuation. Second, the real value of owning startup stock comes at the exit event - IPO or acquisition. This early buyback prevents the stockholder realizing that growth or “pop” in value.

What is an Example of a Clawback Clause?

Famous Example - Skype Shares Worth $0 in $8.5 Billion Acquisition by Microsoft

In 2011, when Microsoft bought Skype for $8.5 billion (that’s a B), some former employees and executives were outraged when they found that their equity was worth $0 because of a clawback in their equity documents. Their shock followed a period of disbelief, during which they insisted that they owned the shares. They couldn’t lose something they owned, right?

One former employee who received $0 in the acquisition said that while the fine print of the legal documents did set forth this company right, he was not aware of it when he joined. “I would have never gone to work there had I known,” he told Bloomberg. According to Bloomberg, “The only mention that the company had the right to buy if he left in less than five years came in a single sentence toward the end of the document that referred him to yet another document, which he never bothered to read.”

Both Skype and the investors who implemented the clawbacks, Silver Lake Partners, were called out in the press as “evil,” the startup community’s indignation did not change the legal status of the employees and executives who were cut out of millions of dollars of value in the deal.

Recent Example - Tanium, funded by Salesforce Ventures and Andreessen Horowitz, claws back employee shares

More recently, Business Insider reported that Tanium, funded by Salesforce Ventures and Andreessen Horowitz, has forced employees to sell their shares back to the company at FMV after their employment is terminated.

The employees interviewed by Business Insider were not aware of that their contract included this clawback when they accepted their offers. “'Surprised' was my initial reaction," one such employee said. "I had not heard of that happening before. To me it felt like a gut punch. One of the reasons for working for the company is dangling the carrot of eventually going public or eventually getting acquired so employees would monetarily benefit from that.”

How Does a Clawback Provision Work?

Hypothetical Example #1 - Company Does NOT Have Clawback Clause for Vested Shares - Share Value: $1.7 Million

Here’s an example of how an individual would earn the value of startup stock without repurchase rights or clawbacks. In the case of an early hire of Ruckus Wireless, Inc., the value would have grown as shown below.

This is an example of a hypothetical early hire of Ruckus Wireless, which went public in 2012. It assumes that the company did not restrict executive or employee equity with repurchase rights or other clawbacks for vested shares. This person would have had the right to hold the shares until IPO and earn $1.7 million.

This is an example of a hypothetical early hire of Ruckus Wireless, which went public in 2012. It assumes that the company did not restrict executive or employee equity with repurchase rights or other clawbacks for vested shares. This person would have had the right to hold the shares until IPO and earn $1.7 million. If you want to see the working calculations, see this Google Sheet.

These calculations were estimated from company public filings with the State of California, the State of Delaware, and the Securities and Exchange Commission. For more on these calculations, see The One Percent: How 1% of Ruckus Wireless at Series A Became $1.7 million at IPO.

Hypothetical Example #2 - Company Has Clawback Clause for Vested Shares - Share Value: $68,916

If the company had the right to repurchase the shares at FMV at the individual’s departure, and they left after four years of service when the shares were fully vested, the forced buyout price would have been $68,916 (estimated). This would have caused the stockholder to forfeit $1,635,054 in value.

In this hypothetical, the individual would have lost $1,635,054 in value if the shares were repurchased at their termination. If you want to see the working calculations, see this Google Sheet.

No Surprises - Identifying a Clawback Clause During Negotiation

As you can see, clawbacks dramatically affect the value of startup stock. For some clients, this term is a deal breaker when they are negotiating a startup offer. For others, it makes cash compensation more important in their negotiation. Either way, it’s essential to know about this term when evaluating and negotiating an offer, or in considering the value of equity after joining a startup.

Unfortunately this term is not likely to be spelled out in an offer letter. It can appear in any number of documents such as stock option agreements, stockholders agreements, bylaws, IP agreements or non-compete agreements. These are not usually offered to a recruit before they sign the offer letter and joining the company. But they can be requested and reviewed during the negotiation stage to discover and renegotiate clawbacks and other red-flag terms.

What is a Typical Clawback Clause?

For examples of typical clawback clause language, see Part 2 - Examples of Clawbacks for Startup Stock.

Attorney Mary Russell counsels individuals on startup equity, including:

You are welcome to contact her at (650) 326-3412 or at info@stockoptioncounsel.com.

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The Gold Standard of Startup Equity - A Guide for Employees

Attorney Mary Russell counsels individuals on startup equity, including:

You are welcome to contact her at (650) 326-3412 or at info@stockoptioncounsel.com.

Learn the three standards that define Startup Equity and three questions to ask to know if you have the real thing. 

Click to view the SlideShare to learn the three standards that define startup equity and three questions to ask to know if you have the real thing. 

See this SlideShare to Learn the three standards that define Startup Equity and three questions to ask to know if you have the real thing. 

1. Ownership - “Can the company take back my vested shares?”

2. Risk/Reward - “What information can you provide to help me evaluate the offer?”

3. Tax Benefits - “Is this equity designed for capital gains tax rates and tax deferral?”

Attorney Mary Russell counsels individuals on startup equity, including:

You are welcome to contact her at (650) 326-3412 or at info@stockoptioncounsel.com.

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Links - Best Web Content on Startup Employee Stock

Attorney Mary Russell counsels individuals on startup equity, including:

You are welcome to contact her at (650) 326-3412 or at info@stockoptioncounsel.com.Here's links to the best web content on startup employee stock:

1.  Risk/Reward

Calculating percentage ownership and understanding fully diluted capital, #1-2 of The 14 Crucial Questions About Stock Options, Andy Rachleff, the Wealthfront Blog

How to use the company's VC valuation to evaluate your equity offer, Video, Stock Option Counsel Blog

How to ask about valuation, #11-13 of The 14 Crucial Questions About Stock Options, Andy Rachleff, the Wealthfront Blog

How preferred stock rights make common stock less valuable, Stock Option Counsel Blog

Knowing your market rate with regards to startup equity, #3-4 of The 14 Crucial Questions About Stock Options, Andy Rachleff, the Wealthfront Blog

How to know how much is enough equity for a pre-Series A startup, Stock Option Counsel Blog

Four factors of how startups decide your salary and equity Mary Russell & Boris Esptein on the Stock Option Counsel Blog

Four factors of how startup decide your equity offer VIDEO Mary Russell & Boris Esptein on the Stock Option Counsel Blog

2. Vesting

Acceleration upon change of control, Gil Silberman on Quora

When acceleration upon change of control does not make sense, Gil Silberman on Quora

What is vesting; what is acceleration upon change of control? #5 & #8 of 14 Crucial Questions about Stock Options, Andy Rachleff, Wealthfront Blog

Does my vesting make sense? Stock Option Counsel Blog

3. Ownership

Can the company take back my vested shares if I leave?, #6 of The 14 Crucial Questions About Stock Options, Andy Rachleff, the Wealthfront Blog

How Skype's repurchase rights gave certain employees $0 of $8.5 billion acquisition payouts, Felix Salmon at Wired

4. Tax Benefits

Three Ways to Avoid Tax Problems When You Exercise Options, Bob Guenley, Wealthfront Blog

Ensuring company compliance with tax rules - and your tax rights - when negotiating an offer, #9-10 of 14 Crucial Questions About Stock Options, Andy Rachleff on the Wealthfront Blog

Incentive stock options, Michael Gray, CPA

Non-qualified employee stock options Michael Gray, CPA

5. Overview

The 14 Crucial Questions About Stock Options, Andy Rachleff, the Wealthfront Blog

Attorney Mary Russell counsels individuals on startup equity, including:

You are welcome to contact her at (650) 326-3412 or at info@stockoptioncounsel.com.

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Negotiating Equity @ a Startup – Stock Option Counsel Tips

 

Attorney Mary Russell counsels individuals on startup equity, including:

You are welcome to contact her at (650) 326-3412 or at info@stockoptioncounsel.com.

Negotiating an offer from a startup? Here's some tips.

1. Know How Much Equity You Want

For employees early in their careers, the only negotiable terms for equity are the number of shares of stock and, possibly, the vesting schedule. The company will already have defined the form in which you will earn those shares, such as stock options, restricted stock units or restricted stock.

Your task in negotiating equity is to know how many shares would make the offer appealing to you or better than your other offers. If you don’t know what you want for equity, the company will be happy to tell you that you don’t want much.

Your desired number of shares should be the result of thoughtful consideration of the equity offer. There is no simple way to evaluate equity, but understanding the concepts and playing with the numbers should give you the power to decide how many shares you want.

One way to compare offers and evaluate equity is to find the current VC valuation of the preferred shares in the company. If a VC has recently paid $10 per share for the company’s stock, and you have been offered 10,000 shares, you can use $100,000 to compare to other offers. If another company has offered you 20,000 shares, and a VC has recently paid $5 for their shares, you could use those numbers to compare the offers.  For more info on finding VC valuations, see: Startup Valuation Basics or contact Stock Option Counsel. 

Remember that the purpose of this exercise is not to have a precise dollar value for the offer, but to answer these questions: How does this offer compare to other offers or my current position? What salary and number of shares at this company would make this a stable, sustainable relationship for me? In other words, will this keep me happy here for some time? If not, it is in nobody’s best interest to come to a deal on that package.

For more information on negotiating equity, see our video: Negotiate the Right Stock Option Offer or our blog with Boris Epstein of BINC Search: Negotiate the Right Job Offer.

2. Look for Tricky Legal Terms That Limit Your Shares' Value

There are some key legal terms that can diminish the value of your equity grant. Pay careful attention to these, as some are harsh enough that it makes sense to walk away from an equity offer.  

If you receive your specific equity grant documents before you are hired, such as the Equity Incentive Plan or Stock Option Plan, you can ask an attorney to read them.

If you don’t have the documents, you will have to wait until after you are hired to study the terms. But you can ask some general questions during the negotiation to flush out the tricky terms. For example, will the company have any repurchase rights or forfeiture rights for vested shares? Does the equity plan limit the kinds of exit events in which I can participate? What happens to my equity if I leave the company?

3.     Evaluate the Equity’s Potential

Evaluate the company to know how many shares would make the equity offer worth your time. You can start by asking the company some basic questions on their expectations for future growth and the exit timeline.

The higher your rank in the company and the stronger your emphasis on these matters, the more likely you are to speak to the CEO, CFO or someone else at the company who can answer these questions. If you want more resources to help you think like a startup investor, there are great online resources on valuation, dilution and exits for startups.

But don’t place too much weight on the company’s predictions of the equity’s potential value, especially if those values are based on an early-stage company’s Discounted Cash Flows (DCF). Even the experts know that the only thing early stage startups know about financial projections is that they are wrong.

Attorney Mary Russell counsels individuals on startup equity, including:

You are welcome to contact her at (650) 326-3412 or at info@stockoptioncounsel.com.

 

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From The Daily Muse

Attorney Mary Russell, Founder of Stock Option Counsel based in San Francisco, advises that anyone receiving equity compensation should evaluate the company and offer based on his or her own independent analysis. This means thoughtfully looking at the company’scapitalization and valuation.

Attorney Mary Russell counsels individuals on startup equity, including:

You are welcome to contact her at (650) 326-3412 or at info@stockoptioncounsel.com.

Thanks Ji Eun (Jamie) Lee for the mention in The Daily Muse! 

“Is This the Right Company?

Investors buy equity in a company with money, but you’ll be earning it through your investment of time and effort. So it’s important to think rationally, as an investor would, about the growth prospects of your start-up.

Attorney Mary Russell, Founder of Stock Option Counsel based in San Francisco, advises that anyone receiving equity compensation should evaluate the company and offer based on his or her own independent analysis. This means thoughtfully looking at the company’s capitalization and valuation. ”
— Ji Eun (Jamie) Lee, "Getting Start-up Equity? Everything You Need to Know" in The Daily Muse

Attorney Mary Russell counsels individuals on startup equity, including:

You are welcome to contact her at (650) 326-3412 or at info@stockoptioncounsel.com.

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Skype Repurchase Rights = Vampire Capitalism

I agree that it is unethical as it goes against the expectation of employees as to how their contributions are valued. If they don't know about it before they choose the company, they are making a choice without an essential term of the deal.

And it goes against the most idealistic ethic of Silicon Valley – that capitalism should be used by groups to organize and cultivate their own creative efforts rather than as a tool of vampires.

But it is not illegal. And I've seen worse in my Stock Option Counsel practice (twice this month alone). Congratulations on paying attention.

Attorney Mary Russell counsels individuals on startup equity, including:

You are welcome to contact her at (650) 326-3412 or at info@stockoptioncounsel.com.

Quora Question: 

What does it say about a company that has a Skype-like repurchase right in their stock option agreement? The company that I work for has a stock option agreement that has a Skype-like repurchase clause (See:  Upgrading Skype and Silver Lake to Evil), basically allowing them to buy back exercise stocks at 1.5x FMV within 90days following the employee's end date/exercise date.  I have never seen anything like this, is this to protect them/screw ex-employees?  It basically mean my vested stocks can be easily bought back at 1.5x?  Isn't it unethical?

 Stock Option Counsel Answer:

I agree that it is unethical as it goes against the expectation of employees as to how their contributions are valued. If they don't know about it before they choose the company, they are making a choice without an essential term of the deal.

And it goes against the most idealistic ethic of Silicon Valley – that capitalism should be used by groups to organize and cultivate their own creative efforts rather than as a tool of vampires.

But it is not illegal. And I've seen worse in my Stock Option Counsel practice (twice this month alone). Congratulations on paying attention.

Attorney Mary Russell counsels individuals on startup equity, including:

You are welcome to contact her at (650) 326-3412 or at info@stockoptioncounsel.com.

 

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Best of Blogs: How to Value and Negotiate Startup Stock Options

NOTE: Updated February 23, 2016.

Attorney Mary Russell counsels individuals on startup equity, including:

You are welcome to contact her at (650) 326-3412 or at info@stockoptioncounsel.com.

We have suggested the following free resources to Stock Option Counsel clients to help them master this area and gain confidence in negotiating their stock options and other employee stock.

1.  Leo Polovet's' Analyzing AngelList Job Postings, Part 1: Basic Stats & Part 2: Salary and Equity Benchmarks

2. Venture Hacks' I have a job offer at a startup, am I getting a good deal?

3. Andy Payne's Startup Equity for Employees 

4. Mary Russell's Startup Equity Standards: A Guide for Employees

5. Wealthfront's Startup Salary and Equity Compensation Calculator (This is very general but people find it helpful.) And Wealthfront's The Right Way to Grant Equity to Your Employees.

6. Patrick McKenzie of Kalzumeus Software's Salary Negotiation: Make More Money, Be More Valued

7. Piaw Na's Negotiating Compensation, from An Engineer's Guide to Silicon Valley Startups

8. mystockoptions.com's How does a private company decide on the size of a stock grant? (You may have to create a login)  

9. Michelle Wetzler's How I Negotiated My Startup Compensation

10. Mary Russell's Video Negotiate the Right Startup Stock Option Offer, based on Mary Russell and Boris Epstein's Bull's Eye: Negotiate the Right Job Offer

11. Mary Russell's Joining An Early Stage Startup? Negotiate Your Salary and Equity with Stock Option Counsel Tips

12. Robby Grossman's Negotiating Your Startup Job Offer

13. John Greathouse's What The Heck Are My Startup Stock Options Worth?! Seven Questions You Should Ask Before Joining A Startup

14. David Weekly's  An Introduction to Stock & Options for the Tech Entrepreneur or Startup Employee

Attorney Mary Russell counsels individuals on startup equity, including:

You are welcome to contact her at (650) 326-3412 or at info@stockoptioncounsel.com.

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