Practice: startup equity versus cash
A startup offers lower base plus options quoted using a headline grant value. Another offer has higher base and different equity. You do not know the startup exercise price or liquidity terms.
Prepare your response
A startup offers lower base plus options quoted using a headline grant value. Another offer has higher base and different equity. You do not know the startup exercise price or liquidity terms.
Original teaching material. All numerical examples are hypothetical, not live market benchmarks. Adapt scripts to your actual situation; no messages are sent from this course.
Scenario constraints
- There is no known sale event or guaranteed exit date.
- The option grant may require exercise cost and has terms you have not seen.
- Near-term cash needs cannot be funded by assumed private-equity proceeds.
Self-review rubric
Draft your answer in the practice editor below before revealing the guidance. This is a self-guided exercise; no automatic scoring is implied.
- Instrument: Distinguishes an option from cash or a share award.
- Questions: Identifies missing exercise/vesting/liquidity terms.
- Downside: Evaluates zero realizable equity.
- Mandate: Compares role support and risk separately.
Reveal a worked response approach
Build a cash-only comparison first. Ask about instrument, units, exercise price, vesting, departure window and available liquidity/ownership context. Keep upside in a separate uncertain scenario.
Do not compute a confident option value from missing inputs. The correct next step is diligence and a risk-aware decision, not choosing the largest quoted equity figure.
Sources and scope
Investor.gov: Employee stock option plans ↗ · Reference checked 2026-10-18
US investor-education terminology distinguishes stock ownership plans from options. The acronym ESOP can refer to different arrangements across jurisdictions.
Investor.gov: Private placements investor bulletin ↗ · Reference checked 2026-10-18
US securities reference used for general private-security liquidity and information risks; it does not determine the law governing an individual award.
Startup India: Employee stock options for startups ↗ · Reference checked 2026-10-18
India-focused option terminology and diligence context. Consult current governing documents and local advice for actual tax or legal treatment; this course calculates no taxes.
This course teaches preparation and communication. It provides no live pay ranges, employer guarantees, tax calculations or personalized legal/investment advice. Governing documents and local rules determine actual award and employment terms.
A startup offers lower base plus options quoted using a headline grant value. Another offer has higher base and different equity. You do not know the startup exercise price or liquidity terms.
Your negotiation draft
Separate offer facts from assumptions, state a truthful prioritized ask, and define your next step. Save your draft before comparing it with the worked guidance.
Self-review checklist
Self-guided practice. Automated AI feedback and code execution are not connected.