Negotiating Equity in a Tech Job Offer: Questions to Ask Before You Sign

A headline share count tells you very little. The value of an equity offer lives in the details, and most of them are fair game to ask about.

Equity is often the largest variable in a Silicon Valley job offer, and also the least understood. An offer of 40,000 options or $400,000 in RSUs sounds concrete, but its real value depends on the company's capital structure, the vesting terms, the tax treatment, and what happens when you leave. Asking good questions before you sign does not require an adversarial posture; recruiters at most companies expect them, and the answers help you compare offers on a consistent basis.

What kind of equity, how many shares, and at what price?

The first question is whether you are being offered incentive stock options, nonstatutory options, restricted stock units, or restricted stock. Each is taxed differently, as IRS Topic 427 outlines for options. The second is the fully diluted share count, because a grant is only meaningful as a percentage of the company. A private company is not required to disclose this, but many will, and reluctance to share it is itself information.

For options, the strike price is generally set at the most recent 409A valuation of the common stock. As Carta's 409A guide explains, that valuation is valid for at most 12 months and typically comes in well below the price investors paid for preferred shares, partly because of a discount for lack of marketability that often runs 25% to 35%. The gap between the two prices tells you something about how much of the company's headline valuation is attributable to preferences that sit ahead of common stock in an acquisition.

What is the vesting schedule, and is there a cliff?

The most common structure is four years with a one-year cliff, which Carta's vesting overview describes as the market standard. Variations are increasingly common, including front-loaded schedules at some public companies and back-loaded ones at others. Ask whether vesting is monthly or quarterly after the cliff, whether refresh grants are typical and on what cycle, and whether any portion accelerates on a change of control.

How long do I have to exercise after I leave?

The post-termination exercise window is one of the most consequential and least discussed terms. According to Carta's PTEP research, most companies still use a window of roughly 90 days, though some have extended it to several years. A short window means you may need to write a large check, and potentially pay alternative minimum tax on ISOs, during a job transition. Some candidates negotiate an extended window; others factor a short one into how they value the grant.

Is early exercise allowed?

Some early-stage companies permit exercising options before they vest, which allows a Section 83(b) election on IRS Form 15620 within 30 days. Combined with the qualified small business stock rules, which under the OBBBA changes summarized by Holland & Knight can exclude gain on a sliding scale after three, four, or five years for stock acquired after July 4, 2025, early exercise can be valuable. It also means paying for unvested shares you may forfeit, and it is not appropriate for everyone.

What information will I receive as a shareholder?

Private companies that issue more than $10 million of equity to employees in a 12-month period must provide financial statements and risk-factor disclosure under SEC Rule 701. Below that threshold, you may receive very little ongoing information. Asking whether the company holds periodic tender offers is also reasonable; Carta's data shows 71 such offers in the first half of 2026, concentrated at Series C and later companies.

Weighing equity against cash

Bay Area housing makes this trade-off concrete. With Santa Clara County median single-family prices near $1.92 million according to a mid-2026 market update, a household saving for a down payment may reasonably prefer salary over speculative upside. Private company equity may be worth nothing, may be illiquid for a decade, and is tied to the same employer that pays your salary. A larger grant at a company that never exits is not a better offer than a smaller one at a company that does, and no one can know in advance which is which.

This article is educational only and is not investment, tax, or legal advice. Please consult a qualified professional before making decisions about an offer.

Important Disclosures

Important Disclosures: Propulsion Capital Management is an investment adviser registered with the State of California Department of Financial Protection and Innovation. Registration does not imply a certain level of skill or training. This article is provided for general informational and educational purposes only and does not constitute investment, tax, legal, or accounting advice, nor an offer or solicitation to buy or sell any security or to adopt any particular investment strategy. The information is believed to be accurate as of the date of publication but is subject to change without notice; tax laws and regulations change frequently and their application depends on individual facts and circumstances. Nothing herein should be relied upon as a substitute for personalized advice from a qualified professional. Investing involves risk, including the possible loss of principal, and past performance is no guarantee of future results. Diversification does not ensure a profit or protect against loss. Any examples are hypothetical, are for illustrative purposes only, and do not reflect the experience of any client. Links to third-party websites are provided for convenience; Propulsion Capital Management does not endorse, and is not responsible for, the content of third-party sites. Propulsion Capital Management does not provide tax or legal advice; please consult your tax adviser or attorney regarding your specific situation.