Equity is a very important part of your compensation that can be rather confusing. Equity is essentially ownership of a company. The dollar value of your equity is based on its valuation and looks very, very different if the company is public or private

• At a public company, equity can almost be treated like a cash equivalent. As an example, let's say you get an offer from Company A that includes $75,000 worth of shares or equity. On the day you start, Company A will effectively buy you $75,000 worth of shares at the current market rate. As Company A's stock increases or decreases in value, so too will your shares.
• At a private company, you’re often given the option to purchase shares which have almost no immediate value. The idea is that over time these shares can grow 10x, 20x, 100x in value which could be life-changing, or they could amount to nothing. There’s no guarantee. Consequentially, there's higher risk than with equity from a public company. Equity from privately held companies is much more difficult to value so we're sharing additional information below.

Evaluating equity at privately held companies 🔒

Generally, most companies won't give you all the information you need to make sense of your equity package. So, it's likely on you to ask questions to learn more. From a high level, it’s important to understand what percentage of the company you own and the terms of that ownership.

<aside> 🚨 Our #1 Recommendation - take the time to learn about equity and how your grant is structured. We've heard countless stories of people missing out on additional compensation because they didn't understand how equity worked. It's not always the most interesting work, but it will pay off!

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Qs to think through (and ask about!) when receiving equity from a private company 🔍

• 1. What is the strike price and current fair market value (FMV)?

• 3**. What are the total number of stocks outstanding?**

• 2. Is my equity in stock options or restricted stock? What are the details of the stock options or RSUs?

• 4. Other things to ask / think about

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Additional Resources (including equity calculators) 📚

• Equity is a complicated topic! Here are some additional resources: