Equity refreshes

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Most startup employees expect to receive an initial equity grant when they join a company. But is that where the equity ends?

Turns out - not at all!

47% of the employees included in a recent Carta analysis had been issued a second, refresh equity grant within two years of joining. 70% received a refresh grant of some kind by the time the initial 4-year grant had fully vested.

These refreshes come in all shapes and sizes, but fall into one of three main categories. Tenure-based refreshes are issued at set tenure periods to ensure an employee is always vesting at least some equity. Promotion refreshes reward an employee as they move up the ladder, and performance refreshes help show appreciation to top performers.

Our Carta Total Compensation team has a wonderfully detailed breakdown on all things equity refreshes - you can jump in here

Obviously issuing tenure, promotion, and performance grants to employees across the org can make tracking equity pool dilution a headache - so founders should be proactive about establishing their compensation philosophy and holding to it.

But good to see that employees are being rewarded for loyalty and performance with ownership beyond that initial slice.

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Peter Walker

Carta Insights