What’s the difference between ISO and NSO options?

Incentive Stock Options (ISO): Only for employees. Tax-advantaged if you meet holding requirements (2 years from grant + 1 year from exercise). Gains taxed at long-term capital gains rate. AMT may apply.

Non-Qualified Stock Options (NSO): Can be granted to anyone. Spread at exercise is ordinary income. No special holding requirements. More flexible but higher tax burden.

How does dilution affect my equity over time?

Each funding round typically dilutes existing shareholders by 15-25%. Your percentage ownership decreases, but the company valuation increases. Example: 0.5% of $50M (Series A) = $250K → 0.35% of $150M (Series B) = $525K. Your percentage dropped but value doubled. Always negotiate anti-dilution provisions and refresh grants.

When should I negotiate equity vs. salary at a startup?

Prioritize equity when: (1) Early stage with high growth potential, (2) You have financial runway, (3) You believe in the mission. Prioritize salary when: (1) Late-stage startup (less upside), (2) You need cash flow, (3) Company financials are unclear. Ideal: negotiate both – ask for higher equity if you accept below-market salary.

What are typical equity grants by role and stage?

Seed: Engineer #1-5: 0.5-2% | PM: 0.3-1% | Designer: 0.2-0.8%. Series A: Senior Engineer: 0.1-0.4% | Lead: 0.2-0.7% | PM: 0.15-0.5%. Series B+: Senior Engineer: 0.05-0.2% | Lead: 0.1-0.3%. Executives get significantly more (1-5%). Always negotiate!

What tax implications should I know about equity compensation?

Exercise timing: Exercising ISO early can minimize AMT. 83(b) election: If you get early-exercisable options, file 83(b) within 30 days to pay taxes on current value (often $0). RSUs at startups: Rare but taxed at vesting. Exit: Qualified ISO gains = long-term cap gains (23.8% max). NSO/RSU = ordinary income (up to 37%) + cap gains on appreciation.