How do I know what my startup equity is actually worth?

You cannot know for certain, because private shares have no public price. You can estimate a range by asking for the strike price, the latest 409A valuation, the most recent preferred price per share, and your ownership percentage after the current option pool. Then run three cases: a strong exit, a modest exit, and zero. Zero is a real and common outcome, so never count equity as guaranteed money.

What questions should I ask a founder about my option grant?

Ask for the number of shares, the total fully diluted shares outstanding, the strike price, the latest 409A value, the vesting schedule, the post-termination exercise window, and whether there are liquidation preferences above 1x. A founder who answers these openly is giving you a good signal. A founder who dodges them is giving you a different signal.

Is a job offer with lower salary but more equity a good deal?

Only if you can afford the lower salary today and you treat the equity as a lottery ticket, not income. A useful rule is to accept only a salary you could live on if the equity never pays out. If the equity does pay, it is a bonus. If it does not, you have not built your life on money that never arrived.

What is a liquidation preference and why does it matter to employees?

A liquidation preference means investors get paid back first when the company sells. If investors put in 50 million dollars with a 1x preference and the company sells for 60 million, only 10 million is left for everyone else, including employees with common stock. This is why a headline sale price can still mean a small or zero payout for your options.

Should I mention my equity evaluation questions during the interview process?

Yes, but save them for the offer stage, after the company has decided it wants you. At that point, detailed questions read as diligence, not greed. Before the offer, focus on showing your experience clearly. Tools like the free Bounce scan at careerbounce.io can help you check that your resume reads cleanly to the screening software startups increasingly use, so you get to the offer conversation in the first place.

Is Startup Equity Worth Anything? Questions to Ask Before You Sign

You have an offer letter in front of you. The salary is a little lower than you hoped, but there is a line that says something like "25,000 stock options," and the founder talked about it like it was a down payment on a house. You want to believe it. You also have rent. This guide gives you the exact questions to ask and the honest math to run, so you can decide with your eyes open instead of your fingers crossed.

What are you actually being offered?

Most startup equity for employees comes as stock options, usually ISOs or NSOs. An option is not stock. It is the right to buy stock later at a fixed price, called the strike price.

That means your equity has value only when two things are true:

The shares are worth more than your strike price.
You can actually sell them, which usually requires an acquisition or an IPO.

If either condition fails, your options are worth zero. Not "less than expected." Zero. Roughly speaking, most startups do not reach a big exit, so zero is not a scary edge case. It is one of the most common outcomes, and any honest evaluation starts there.

If your offer is RSUs instead of options (more common at later-stage companies), the mechanics differ, and it is worth reading a plain-English comparison like RSUs vs stock options before you continue.

The questions to ask before you sign

You are allowed to ask all of these. A good founder expects them. Ask by email so you have the answers in writing.

How many shares is my grant, and how many fully diluted shares are outstanding? Without both numbers, "25,000 options" is meaningless. 25,000 out of 10 million shares is 0.25 percent. Out of 100 million, it is 0.025 percent.
What is the strike price, and what was the most recent 409A valuation? The 409A is an independent appraisal of the common stock. If your strike price equals the latest 409A, you are buying in at today's estimated fair value, and your upside is whatever growth comes after you.
What was the price per share in the last funding round? Preferred shares (what investors buy) usually price higher than common. The gap between the preferred price and your strike hints at how much paper upside exists right now.
What is the total liquidation preference stack? In plain terms: how much money gets paid to investors before common shareholders see anything. Ask, "If the company sold tomorrow for the last round's valuation, what would a share of common be worth?"
What is the vesting schedule and the post-termination exercise window? A standard schedule is four years with a one-year cliff. The exercise window matters just as much: 90 days is common, and it can force you to spend real cash to keep options after you leave. The mechanics are covered in detail in vesting schedules explained.
Has the option pool been refreshed recently, and is another round planned? Both dilute you. Dilution is normal, but you want to know the direction of travel.

How to run the honest math

Take your grant and run three cases on paper. This takes ten minutes and removes most of the fog.

Say you are offered 20,000 options at a $2 strike, out of 20 million fully diluted shares (0.1 percent), and the company last raised at a $200 million valuation.

Best case. The company exits at $1 billion after some dilution. Suppose your stake is diluted to 0.07 percent. Your shares are worth about $700,000, minus the $40,000 exercise cost and taxes. Life-changing, and rare.
Middle case. The company sells for $150 million, but investors have $80 million in preferences. Roughly $70 million is left for common. Your diluted 0.07 percent is about $49,000 before exercise costs and taxes. Nice, not a house.
Zero case. The company shuts down, or sells for less than the preference stack. You get nothing, and if you exercised early, you also lose the cash you paid to exercise.

Now weigh the salary gap. If this job pays $25,000 less per year than a comparable stable job, you are effectively paying $100,000 over four years for that lottery ticket. Sometimes that trade is worth it, for the learning, the title jump, or genuine belief in the company. Just make the trade knowingly.

Signals that the equity is more, or less, likely to matter

No one can promise an outcome, but some signals shift the odds:

More promising: the founder answers every question above without flinching, the preference stack is simple (1x, non-participating), the exercise window is extended (some companies now offer 5 to 10 years), and revenue is real and growing.
Less promising: the company will not share fully diluted share counts, "we don't disclose that" comes up more than once, the last round was a down round nobody mentions, or the pitch leans entirely on the equity because the salary is far below market.

A refusal to share basic numbers is not automatically sinister, but you cannot value what you cannot see. In that case, mentally price the equity at zero and evaluate the offer on salary, learning, and the people alone.

Negotiating the equity, not just the salary

Equity terms are often more flexible than salary at a startup, because they do not hit this month's burn rate. Reasonable asks include:

A larger grant instead of a salary bump the company cannot afford.
An extended post-termination exercise window.
Clarity, in writing, on refresh grants at promotion or strong performance.

Keep the tone collaborative. You are not accusing anyone; you are doing the diligence any investor would do, because that is what you are: an investor putting in years of your life. If you are weighing this offer against another one, a structured framework like comparing two job offers side by side helps you keep the equity guesswork from swamping the concrete parts.

A resume you can defend gets you better equity conversations

Here is the part most equity guides skip: your leverage in this conversation was set weeks earlier, by how clearly your experience came through in the screening process. Startups move fast on candidates whose background reads clearly and slow on ones they have to squint at.

Before your next application, run your resume through the free "Beat the Bots" scan at careerbounce.io. It shows you exactly what applicant tracking software reads from your resume, and it runs on your device, so your resume never leaves your laptop. It will not promise you a job, and neither will we. It will show you what the bots see, so the real you gets into the room where equity offers get made. That part is free, private, and takes about a minute.