EQUITY EDUCATION CENTER
Salaries are set numbers. Equity, on the other hand, could give you life-changing returns if the company grows quickly while you’re there. If your company gives you 2,000 stock options at a strike price of 20 cents (this means you can buy a share of stock for 20 cents), you buy all 2,000 shares, and you sell when they’re worth $50, you could end up netting almost $100,000 (minus the $400 it cost you to purchase your shares).
Of course, your equity could end up not being worth anything, or you may not be able to sell your shares.
But if you have equity in a company that makes it big, it could change your life. Just look at the artist who painted Facebook’s first office.
Learn more: https://carta.com/blog/eshares-is-now-carta/
Stock options are the opportunity to exercise (purchase) a certain amount of company shares at an agreed-upon price. They’re not actual shares of stock.
Learn more: https://carta.com/blog/employee-stock-options/
In the context of equity, vesting is the process of earning stock options or RSUs over time. At many companies, your equity vests over four years and you can only exercise (purchase) vested stock options.
Learn more: https://carta.com/blog/what-is-stock-vesting/
Exercising stock options means purchasing shares of stock at the set price defined in your option grant. When your company gives you stock options, they’re not giving you shares of stock outright—they’re giving you the right to buy shares.
Learn more: https://carta.com/blog/exercising-stock-options/
