What Is My Startup Equity Actually Worth?
A realistic calculator for employees evaluating startup equity offers. Model future dilution, exercise costs, and exit scenarios to understand what your options could actually be worth.
Your Equity Details
Current Ownership
0.500%
Paper value: $200K
After 3 More Rounds
0.256%
49% diluted
At $500.0M Exit
$1.2M
After $50K exercise cost
Understanding Your Offer Letter
Number of Shares vs Percentage
"50,000 shares" means nothing without knowing the total share count. Always ask for your percentage on a fully diluted basis. 50,000 shares out of 10,000,000 is 0.5%. Out of 50,000,000 it is 0.1%.
Exercise Price and 409A
Your exercise price is set by the 409A valuation at time of grant. If the 409A is $1 and you have 50,000 options, exercising costs $50,000. The value is the difference between current FMV and your exercise price times your shares.
Vesting Schedule
Standard: 4-year vesting, 1-year cliff. Nothing vests in the first year. After the cliff, 25% vests, then monthly/quarterly thereafter. If you leave after 2 years, you have vested 50% of your grant.
Fully Diluted Share Count
This includes all issued shares, all options (yours and everyone else's), all convertible securities, and the entire option pool. Your percentage is calculated against this number, not just issued shares.
Red Flags in Startup Equity Offers
No 409A valuation on file (required by law for option pricing)
Company will not disclose the fully diluted share count
Unusually short post-termination exercise window (less than 90 days)
No information about the last funding round or current valuation
Vesting schedule has no cliff (may indicate the company is not serious about retention)
Equity percentage is not disclosed, only a share count