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How to talk about equity so candidates actually understand it
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Hiring Strategy
Equity is the single biggest lever an early stage company has, and it is also the thing most founders explain worst. We have watched strong candidates turn down real upside because nobody walked them through it, and we have watched candidates accept offers they did not understand and resent a year later. Both outcomes are avoidable.
Give the whole picture, not just a number
A grant of fifty thousand options means nothing on its own. Candidates need the number of options, the strike price, the current preferred price, the fully diluted share count and the vesting schedule. If you are not willing to share total shares outstanding, a sophisticated candidate will assume the worst and price your offer accordingly.
Do the math out loud
Walk through what the grant is worth at a few honest outcomes. What it looks like if the company sells for fifty million, for two hundred million, for a billion. Show the work. This is not a promise, it is a way of making an abstraction concrete, and candidates trust founders who are willing to do it in front of them.
Be honest about the risk
Most startups do not produce life changing equity outcomes. Saying that plainly buys enormous credibility and filters for exactly the people you want, the ones choosing this on purpose rather than by accident.
Explain the mechanics that bite later
Post termination exercise windows, early exercise and 83(b) elections, what happens in an acquisition, and what a down round would do to their position. A ninety day exercise window can quietly make a grant worthless for someone who cannot write a large check. Candidates find this out eventually. It is much better that they hear it from you.
Put it in writing
Send a one page summary alongside the offer. Not legalese, just the numbers and the assumptions in plain language. It is the cheapest trust building document you will ever produce.
Equity is how early stage companies compete with salaries they cannot match. Explaining it well is not a nice to have. It is the difference between an offer that feels like a lottery ticket and an offer that feels like ownership.
