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How much equity can you give employees
Read time 2.0 minutes.
Founders, here’s a crazy stat: over 70% of vested options go unclaimed. This means that when you are giving equity to employees, most of them don’t actually end up taking any stake in your business, despite how much you likely fought them to give up as little equity as possible when hiring!
Why? There are a few common reasons:
Employees don’t realize they have to take action.
They don’t have the cash to cover the exercise cost.
They aren’t confident the equity will ever be worth it.
Even if they believe in the potential, they worry they won’t see a liquidity event for years.
Why does this matter? Well, it means that founders should be more willing to grant equity thoughtfully, without panicking about “losing” it. Many of the options you issue will come back as employees move on. Equity is a tool to attract and retain talent—but its power extends beyond financial considerations. It’s motivational and cultural.
Treat equity as part of the long game, not a short-term transaction. Your team is building the company with you, and most of them won’t exercise every single option. That’s okay—give generously, focus on culture and responsibility, and the rest will sort itself out.
Are you generous with the equity that you give to employees? |
Onwards and Upwards,
