Startup Equity Evaluation Checklist

30+ essential checkpoints every founder and employee should review before signing an equity offer. Don't leave money on the table.

📋 34 Checklist Items ⏱️ 10 min read 🖨️ Print-ready
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1

Grant Basics

Start here. Confirm the fundamental details of your equity grant.

Confirm equity type (ISOs, NSOs, or RSUs)
Different types have different tax implications. ISOs have special tax treatment but have limits.
Verify total percentage ownership
Know what percentage of the company you're actually getting, not just the number of shares.
Calculate ownership split →
Confirm current company valuation
Understand the current 409A valuation and how it affects your strike price.
Learn about 409A →
Understand the strike price
This is what you'll pay per share to exercise your options. Lower is better.
Check total outstanding shares
Your percentage = your shares ÷ total outstanding. Make sure you have the right denominator.
2

Vesting Schedule

When do you actually own your equity? Vesting determines when you can keep your shares.

Confirm vesting schedule length
Standard is 4 years. Know how long you need to stay to fully vest.
Visualize vesting schedule →
Check cliff period
Typically 1 year. If you leave before the cliff, you get nothing.
Understand monthly vs quarterly vesting
Monthly vesting is better—leaving after 6 months means keeping 6 months worth.
Check for accelerated vesting triggers
Single-trigger (acquisition) or double-trigger (acquisition + termination) can protect you.
Confirm what happens to unvested shares if you leave
Usually forfeited. Some companies offer extended exercise windows.
3

Exercise Costs & Taxes

Exercising options costs money and triggers taxes. Plan ahead.

Calculate total exercise cost
Strike price × number of shares. Can be thousands to tens of thousands.
Calculate exercise cost →
Understand ordinary income tax on exercise
You pay income tax on the difference between strike price and current value.
Check if 83(b) election makes sense
File within 30 days of exercise to pay taxes now on the full value. Can save huge money later.
83(b) calculator →
Understand AMT implications (for ISOs)
ISOs can trigger Alternative Minimum Tax. Calculate before exercising.
Plan for liquidity to exercise
You need cash to exercise. Will you have it when the time comes?
4

Future Dilution

Your percentage WILL shrink. Understand how much.

Model dilution from future funding rounds
Each round dilutes existing shareholders. See what happens after Series A, B, C.
Model dilution →
Check for option pool increases
New hires need equity. Option pools typically dilute everyone.
Understand anti-dilution provisions
Some investors get protection from dilution. Regular employees usually don't.
Learn about anti-dilution →
Check if your grant includes refresh provisions
Some companies promise additional grants to offset dilution. Get it in writing.
Model your ownership after 3-4 rounds
Be realistic. 1% today might be 0.3% after Series B.
5

Exit Scenarios

What happens when the company sells or IPOs?

Calculate payout at different exit values
Model your return at $100M, $500M, $1B+ exits.
Calculate exit payout →
Understand liquidation preferences
Investors get paid first. Participating preferred means they double-dip.
Learn about liquidation →
Check for exercising deadlines post-exit
Some companies require immediate exercise upon acquisition. Do you have the cash?
Understand what happens to unexercised options at exit
Usually canceled. You get nothing if you haven't exercised.
Know the exercise window after leaving
Standard is 90 days. Some companies offer longer. This affects your ability to keep equity.
6

Red Flags to Watch

These terms can significantly reduce your equity value.

Check for repurchase rights
Company can buy back your shares at the strike price. Avoid if possible.
Look for "clawback" provisions
Company can reclaim vested shares for cause or no cause.
Verify if equity is performance-based
Some grants require hitting milestones. Understand what triggers vesting.
Check for non-compete restrictions
Can you work for competitors? This affects your future career options.
Understand assignment of invention
You might assign IP rights to the company. Know what you're giving up.
7

Negotiation Checklist

Everything you should negotiate before signing.

Compare your offer to industry benchmarks
Know what's typical for your role, stage, and location.
View equity benchmarks →
Get the full offer in writing
Verbal promises mean nothing. Get everything documented.
Analyze your offer →
Negotiate equity OR cash, not just one
Understand the full compensation package. Some companies are flexible.
Ask about refresh grant policies
How does the company handle equity refresh grants as you tenure increases?

⚠️ Critical Warning

Never sign an equity agreement without fully understanding the terms. Equity is complex, and small details can mean the difference between a life-changing payout and nothing. When in doubt, consult with a lawyer or tax professional.

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