equity_compensation

What problem does it solve?

This Skill helps startups design and manage their equity compensation programs effectively, ensuring they attract and retain talent while responsibly managing dilution and avoiding costly tax liabilities.

Core Features & Use Cases

• Option Pool Sizing: Determines the optimal size for employee stock option pools based on hiring plans and market benchmarks.
• Grant Instrument Selection: Advises on the choice between Incentive Stock Options (ISOs) and Non-Qualified Stock Options (NSOs), detailing tax implications.
• 83(b) Election Guidance: Explains the importance and process of filing 83(b) elections for restricted stock.
• 409A Valuation Management: Outlines the triggers and importance of regular 409A valuations to set fair market value and exercise prices.
• Vesting Schedule Design: Recommends standard and competitive vesting schedules, including cliff and acceleration provisions.
• Departing Employee Guidance: Provides a framework for advising employees on exercising vested options upon departure.
• Liquidity Event Planning: Discusses strategies for providing liquidity to employees before an IPO or acquisition.

Quick Start

Use the equity_compensation skill to design an initial option pool for a seed-stage startup with plans to hire 5 engineers and 2 VPs in the next 18 months.