Compensation
Understand your equity before you count on it
A simple exercise to find out what your equity is, how it works, and what you'd need to know before it shapes a decision
Gather your equity documents, write down what you have and how it vests, and list the questions you'd need answered to know what it might be worth.
- About 30 minutes
- You and the company
- Whenever equity changes
- Go find it
Why this can work
Equity is only confusing until you've asked a handful of specific questions. Most of what matters sits in a few documents and a few answers from the company. Once you have them, you can describe what you hold in plain words and tell a real part of your pay from a hopeful story.
Read moreHow to understand stock options and RSUs in your offer
You’ll come away with a plain summary of your equity and the questions that decide what it's worth.
- Gather what you have.
The offer letter, your grant agreement, the company's equity plan, and the equity portal if your company uses one.
Tip: If all you have is a number of shares in an offer letter, that's where you start, not where you finish.
- Write down what kind it is and how it vests.
Stock options are the right to buy shares later at a set price. RSUs are shares you receive as they vest. Note the vesting schedule, any cliff before the first portion vests, and what happens if you leave.
- List the questions that decide its value.
Private company: total fully diluted shares, strike price, latest valuation or share price, how long you'd have to buy options after leaving, and what happens if the company is sold. Public company: vesting dates, share price, and when you're allowed to sell.
- Ask the company.
The recruiter, HR, or whoever runs equity. These are normal questions, and a good company expects them.
You“I want to make sure I understand the equity properly. Could you tell me the total number of fully diluted shares, the strike price, and how long I'd have to exercise if I left?” - Write a plain summary and a range that starts at zero.
A few sentences on what you hold and how it works, and a range from nothing to optimistic. Count on cash for the bills.
Good times to repeat it: when an offer includes equitywhen you receive a new grantbefore you leave a job with vested options
Making it work for you
Every workplace is different. Here’s what to think about before you start, and what might get in the way.
Things to think about
Ten thousand shares of a million is one percent. Ten thousand of a hundred million is a rounding error. The total is the question that makes the number mean something.
What might make this harder
You can't value it without them, so treat it as unknown when you decide. It's fair to ask why; some companies are cautious, and the answer is information either way.
Questions people ask
How do I know what my stock options are worth?
You need your number of options, the total fully diluted shares, the strike price, and a recent valuation or share price. Even then, private company options are uncertain until there's a way to sell.
What is a vesting cliff?
A period, often the first year, before any of your equity vests. If you leave before the cliff, you usually get none of it; after it, a first portion vests at once and the rest vests over time.
What's the difference between stock options and RSUs?
Stock options are the right to buy shares at a set price, so you pay to own them. RSUs are shares you receive as they vest, with no purchase price. They're taxed differently, too.
What questions should I ask about equity in a job offer?
What type it is, how it vests, the total fully diluted shares, the strike price, the latest valuation, how long you'd have to exercise if you left, and what happens if the company is sold.
Why this works, and where it comes from
Equity is supposed to make you think like an owner, and at its best it does. But for most people it arrives as a single number with no context, and the mind fills the context in with hope. That's human, and it's also how people make big decisions on a number they never understood. Turning down a better offer, or staying somewhere too long, for equity they couldn't have described.
From the company's side, equity is a way to share future upside without spending cash now. That isn't a trick. It's how many young companies can afford to hire people they couldn't otherwise pay. But it means the risk is shared too. New funding rounds usually shrink your percentage, investors are often paid back before employees when a company is sold, and some companies never sell at all. Understanding your part of that is simply understanding your pay.
The questions on this page are the ones that turn a share count into something you can reason about. None of them is rude, and a company that answers them openly is telling you something good about itself. You won't always get every answer, and that's information too.
This is education, not financial or tax advice. Nobody can tell you what private company equity will be worth, including the company. The aim is only that you know what you hold, know the questions, and have asked them, before it shapes a decision.
Other simple things to consider
What to do next
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An exercise written by Truest, based on our experience. Last updated September 25, 2026. We sell a career membership; where that’s relevant above, we say so.