A lot has been written about stock option grants, what they are, and how they work. I’ll spare you the minutia as you can read it elsewhere. One question I do get when I do consulting is how much to grant to employees versus directors etc…so here is a quick guide. Remember that only the percentage of the company really matters.
Another interesting note from Tomasz Tungz here that there has been a trend towards increasing cash compensation to startup management teams. Overall VPEs have seen cash increases of 10-16% and equity decreases of 17-19% and VPPs have had cash increases of 8-26% and equity decreases of 25-30%. My guess is that this is related to the size of rounds being larger lately and the companies being cash rich. What do you think?
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