Equity is the component of a tech offer that candidates most frequently accept without negotiating — and the one with the widest variance between what you're offered and what's possible. Whether the offer includes stock options, RSUs, or token grants, the terms beyond the grant size (vesting schedule, exercise window, strike price, cliff length) are almost always negotiable and can be worth more than the headline equity number. This guide gives you the framework to evaluate, compare, and negotiate equity components of any tech compensation offer.
What types of equity are offered in tech, and how do they differ?
The equity component of your offer changes depending on whether the company is public or private, early or late stage. The same "equity value" on paper can have very different actual worth depending on the type.
RSUs (Restricted Stock Units) at public companies are the clearest form of equity: you receive company shares that vest over time, and you can sell them on the open market once vested. There's no exercise decision, no strike price, and no liquidity risk — just ordinary income tax when shares vest.
Stock options (ISOs and NSOs) at private companies give you the right to purchase shares at a fixed strike price (the exercise price, set at the 409A fair market value when the options are granted). If the company's value increases, you can exercise options and own shares. If it doesn't, or if the company fails, the options expire worthless. ISOs (Incentive Stock Options) have favorable tax treatment; NSOs (Non-Qualified Stock Options) are taxed as ordinary income at exercise.
RSUs at private companies (increasingly common at late-stage startups) behave differently from public RSUs — they typically have a dual trigger for vesting: time-based vesting plus a liquidity event (IPO, acquisition). Without a liquidity event, private company RSUs may never actually vest into liquid shares.
What is standard vesting and what's worth negotiating?
The 4-year cliff is a standard starting point, not a ceiling
The industry-standard vesting schedule is 4-year vesting with a 1-year cliff: 25% of your grant vests after 12 months, then monthly vesting for the remaining 36 months. This is the default offer structure — it's not necessarily the best you can get. Many companies will negotiate:
- Accelerated vesting on acquisition (single-trigger): All unvested shares vest immediately if the company is acquired. This is valuable and often available to ask for.
- Double-trigger acceleration: All unvested shares vest if the company is acquired AND your role is eliminated within 12 months. More commonly granted.
- Shorter cliff: Some companies will agree to a 6-month cliff instead of 12 months, particularly for senior hires.
- Front-loaded vesting: Instead of 25/25/25/25 annually, negotiate for more grants in years 1 and 2 (e.g., 30/30/20/20) — this protects you if the company trajectory changes.
The exercise window is the most negotiable and most overlooked term
Stock options must be exercised within a certain period after leaving the company — the standard exercise window is 90 days. This is particularly problematic at high-valued private companies where exercising means paying a large amount in cash (the strike price) and owing taxes on the spread, for illiquid private shares. A 90-day window effectively forces most employees to abandon unvested-and-unexercised options when they leave.
Many companies will extend the exercise window to 1, 2, 5, or 10 years. Some companies (Stripe, Coinbase, and others) have made this a policy. Asking explicitly: "Can we extend the post-termination exercise window to 5 years?" is one of the highest-ROI negotiation asks for private company option grants. The company's cost is zero unless you actually exercise; your benefit can be enormous if the company's value grows after you leave.
Industry perspective
"According to Carta's State of Private Markets 2025 report, the median exercise window at US venture-backed companies is still 90 days — but companies that extended exercise windows to 5 or 10 years showed 18% lower employee turnover among option-holding employees in their first two years. Carta notes that extended exercise windows have become a recruiting differentiator at companies competing with public-company RSU offers, where liquidity is not a constraint."
— Carta State of Private Markets 2025
How do you value private company equity?
Discount for illiquidity before comparing to public RSUs
Private company equity is illiquid. You cannot sell it when you need cash, and you may never be able to sell it if the company doesn't exit. Before comparing a private company option grant to a public company RSU grant of the same headline dollar value, apply a liquidity discount of at least 40–60% for Series A–C companies, and 20–30% for late-stage pre-IPO companies. An offer that appears to close a compensation gap with a public company RSU offer may actually be worth substantially less.
Ask for the cap table details before signing
To value equity correctly, you need: (1) the total number of fully diluted shares outstanding, (2) the liquidation preference stack (investors with 1× or 2× liquidation preferences get paid before common shareholders in an exit), (3) your option strike price relative to the current 409A value, and (4) the most recent 409A valuation. Companies must provide this information to offer recipients under SEC Rule 701. If a company refuses to share the fully diluted share count or liquidation preference structure, that is a significant red flag.
Estimate equity value with a scenario model
Build a simple model: current valuation × expected exit multiple × your ownership percentage × (1 - dilution from future rounds) × dilution discount = expected equity value at exit. For a Series B company at $100M valuation, your 0.1% stake after 20% dilution in a future round and a 50% liquidity discount has an expected value at a $500M exit of: $500M × 0.1% × 0.8 × 0.5 = $200K. This is the number to compare against a public RSU grant, not the $100K face value of your options at current valuation.
How do you negotiate equity specifically?
Negotiate grant size and terms simultaneously
Most candidates only negotiate the grant size (number of shares or dollar value of the grant). Terms are equally important and less commonly challenged, which makes companies more willing to move. Negotiate: (1) the grant size first to establish the headline equity, then (2) request the extended exercise window, (3) ask about acceleration provisions, and (4) confirm vesting schedule flexibility.
The structure of the conversation: "I'm very interested in the role. Before I can make a final decision, I want to understand a few equity terms — specifically the post-termination exercise window and whether there's any acceleration on acquisition. Can we discuss those?" Most companies have a prepared answer for this question and it doesn't signal aggression — it signals sophistication.
Use competing offers to set the equity benchmark
If you have a competing offer with different equity terms — a public company RSU offer versus this private company option grant — the comparison framework from the previous section lets you have a specific conversation: "The competing offer includes $80K in annual RSU vesting with immediate liquidity. To make your equity package comparable in expected value, I'd need either a higher grant size or an extended exercise window. What flexibility does the company have?" For more on using competing offers in negotiation, the job offer comparison framework covers the full total compensation analysis.
What percentage of equity is standard by company stage?
Individual contributor equity percentages at venture-backed companies, rough benchmarks:
| Role | Seed | Series A | Series B | Series C+ |
|---|---|---|---|---|
| Engineer (IC) | 0.10%–0.50% | 0.05%–0.25% | 0.02%–0.10% | 0.005%–0.05% |
| Senior engineer | 0.25%–1.00% | 0.10%–0.50% | 0.05%–0.20% | 0.01%–0.10% |
| Staff/principal | 0.50%–2.00% | 0.25%–1.00% | 0.10%–0.40% | 0.02%–0.20% |
| VP Engineering | 1.00%–3.00% | 0.50%–2.00% | 0.20%–1.00% | 0.05%–0.30% |
These are fully diluted percentages. If you're offered significantly below these ranges and the company is early-stage, that's a negotiation anchor point. If you're above these ranges at a late-stage company, the equity is likely already priced into the market-rate offer. For full salary negotiation tactics, see salary negotiation for tech roles.
Key takeaways
The exercise window is the most negotiable and highest-ROI equity term
Most candidates negotiate grant size and ignore exercise window. A 90-day exercise window at a high-valued private company can make your options worthless when you leave — you can't afford to exercise, so you walk away. A 5 or 10-year window costs the company nothing and preserves your upside. Asking for an extended exercise window is the single highest-ROI equity negotiation ask for private company offers, and it's accepted at a surprisingly high rate.
Liquidation preferences determine whether your equity pays out at all
An acquisition at 2× the last round valuation sounds like a success. If investors hold 2× liquidation preferences on $40M invested into a $60M acquisition, all $40M goes to preferred shareholders first, leaving $20M for common shareholders (employees). Your options may be underwater even on a nominal "up" exit. Understanding the liquidation preference stack — and asking for it before accepting — is as important as understanding your option count.
Late-stage private company equity is more liquid than it appears
Secondary markets (Forge, Nasdaq Private Market, EquityZen) allow employees at late-stage companies to sell vested shares before an IPO. Companies increasingly permit secondary sales in tender offers. If you're joining a late-stage company (Series D or later with a clear IPO pathway), the liquidity timeline may be shorter than you think — and factoring that in changes the equity discount you should apply.
Frequently asked questions
What's the difference between stock options and RSUs, and which is better?
RSUs are simpler and usually preferable for risk-averse employees: you receive shares at vesting, pay ordinary income tax on the value received, and can sell immediately (if the company is public). No decision required. Stock options require an exercise decision: you pay the strike price to convert options to shares and owe taxes on the spread between strike and fair market value. Options are only better if the company value grows substantially — in that case, ISOs with favorable tax treatment can outperform RSUs significantly. At public companies: prefer RSUs. At early-stage private companies: options are the norm and can have more upside.
When is the right time to negotiate equity?
After you have a written offer, before you accept. This is the point of maximum leverage — you've been selected, they want you, and you haven't signed. After you start, your leverage drops to near zero for the initial equity grant (though refresh grants are negotiable at review cycles). Don't negotiate compensation in the first interview round — it signals that you're more interested in pay than the role, and interviewers note it.
Can I negotiate equity refreshes?
Refresh grants are the equity you receive after your initial grant begins to cliff — typically at year two or three of your tenure. Refreshes are standard at large companies and less consistent at startups. You can negotiate: the size of your expected refresh at the offer stage ("what is the typical refresh grant for engineers at this level?"), the frequency of refresh evaluation, and performance criteria for above-median refreshes. Getting the refresh policy in writing before accepting is worth doing.
What happens to my unvested options if the company is acquired?
It depends on the acquisition structure and your vesting terms. Common outcomes: unvested options are assumed by the acquirer and continue vesting on the original schedule; unvested options are accelerated (if you have single or double-trigger provisions); unvested options are cancelled and paid out at acquisition price. The worst case: unvested options are cancelled with no payment if the acquisition price equals or is below your strike price. Ask your potential employer what happens to unvested equity in an acquisition — it's a normal due diligence question.
How do I handle a company that refuses to share cap table details?
A company that declines to provide: fully diluted share count, liquidation preference structure, most recent 409A valuation, and your pro-forma ownership percentage is asking you to accept equity without being able to value it. This is not normal — offer recipients at US venture-backed companies are entitled to this information. Treat refusal as a significant risk signal, not a confidentiality concern. You can request this information from your offer contact or, if the company uses a platform like Carta or Pulley, ask if they can share your grant details through the platform.
Bottom line
- RSUs at public companies are simpler and less risky; options at private companies have higher upside and more terms worth negotiating
- Always ask for an extended exercise window (5+ years) on private company options — highest-ROI equity negotiation ask
- Request fully diluted share count, liquidation preferences, and 409A valuation before accepting private company equity
- Use the equity percentage benchmarks by stage to assess whether your grant is competitive
- Track offers and compare compensation components on Hire.monster