Options are also horrible - unless you have some agreement which allows you to exercise them upon a liquidity event (i.e. buy-out, IPO). Get shares vs. options when given a chance.
Options are also horrible - unless you have some agreement which allows you to exercise them upon a liquidity event (i.e. buy-out, IPO). Get shares vs. options when given a chance.
Shares vs. options may also not be a meaningful distinction. Any equity plan that has seen a lawyer has been scrubbed so that employees have no rights. If you "own" shares in a funded company, the odds are strong that they can be taken back from you (or devalued totally) at the whim of the board.
The place where the company probably has the most negotiating flexibility is US dollars. Employees get hired for wildly different salaries. Don't waste time bickering about options vs. shares: spend your time getting the dollar number up.
Let's say the startup is currently valued at $5M, and you are given shares for 1%. You need to write a check to the IRS for your share of $50,000 in income.
Alternatively, if you are give the equivalent number of options, you do not have any tax liability until you exercise those options.
This is one reason (of many reasons) why it is almost unheard of for a startup to grant employees shares instead of options.