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Understanding Your Startup's Equity Offer
An 8-minute essay on reading a startup equity offer the way an investor would
Why it’s worth your time
Chris Kong's essay is a practical way into a startup offer whose equity is quoted as a dollar value you can't check. He walks through a friend's real Series A offer, lightly changed, from shares to ownership percentage to what it might be worth after future rounds, and what could shrink it. A few minutes with it can give you better questions before you sign.
Turning a stock grant into a percentage
The essay · 8 min · Free
How to get it
Opens their site. We don’t copy it here; we’d rather they get the read.
- Read the essay.
Read the four steps in order, and spend a minute on each table.
- Ask for the numbers behind the grant.
Before you accept, email the recruiter or hiring manager for the figures that turn the dollar value into ownership.
You“Thanks again for the offer. Before I decide, could you share the total number of shares outstanding, the strike price and the vesting schedule for the options? I'd like to understand what percentage of the company the grant represents.”
Good moments for this: the day an offer arrivesbefore you counter an offerwhen comparing two startups
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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
Kong warns against assuming founders know how to set employee equity, which makes a polite question about the numbers a normal part of the process.
What might make this harder
Kong's walkthrough treats the percentage as the number to anchor on. Ask once more and explain why you want it; if the answer is still no, note that you're comparing offers without the figure the essay starts from.
Questions people ask
How do I evaluate a startup equity offer?
Kong's approach starts by turning the grant into a percentage of the company, then compares it with benchmarks and with what could dilute or shrink it. His essay walks through each step with a real offer.
What is Understanding Your Startup's Equity Offer about?
A 2022 essay by Chris Kong, written for his Substack newsletter Ante Up when it covered angel investing, that uses a friend's Series A offer to show how to value employee stock options the way an investor would.
What is a liquidation preference?
Preferred shareholders, usually investors, have the right to get their money back before common shareholders such as employees and founders. It matters most when a company sells for less than hoped.
What it says, and how it holds up
A startup offer often describes equity as a dollar figure; in Kong's example, $146,000 in stock options. That number can say more about how the offer is pitched than about what you'd own. Kong's essay is a practitioner's walkthrough, written from an angel investor's chair, of how to get from that figure to something you can judge.
His four steps start with the ownership the options represent once vested, 0.2% in the example. He compares that with benchmark data, where it sat at the low end, and suggests the friend could push for more options, a lower exercise price or faster vesting. He models the upside through later funding rounds, where, if the friend vested and exercised all his options and the company reached a Series D in five years or so, they could be worth about $1 million after dilution, and then turns to the downside: liquidation preferences decide who is paid first if the company sells cheaply, and in an acqui-hire, employees' common stock can end up worth very little.
The essay is from 2022, about a Bay Area startup in that year's US market, and US tax rules like the small-business stock exclusion it mentions can change, so check the current rules before leaning on it. The method is built around early-stage stock options; restricted stock units work differently, and the walkthrough only mentions them, pointing to an explainer on the difference. This explains how things usually work; it isn't financial, tax or legal advice for your situation.
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Picked by Truest and described in our own words. The original belongs to its creator. Last updated October 9, 2026. We sell a career membership; where that’s relevant above, we say so.