Frequently Asked Questions

Should I grant stock or options?

Most startups grant stock at the beginning when their price per share is low because it is better for the grantee in terms of taxes and also less complicated for the startup. Usually, startups wait to set up their Equity Incentive Plan (aka Stock Option Plan) until their valuation and price per share are higher. After the Equity Incentive Plan is created, startups typically will grant stock options instead of stock. The stock option removes the financial burden on the grantee to pay immediately, which otherwise can be costly if the price per share is high.

Last updated on November 19, 2018