Why startups should consider issuing restricted stock rather than options.

October 1, 2015

 

 

Early on, before the company’s valuation is too high, startups can give their employees a significant benefit by offering restricted stock rather than options.  Restricted stock is stock received 100% on day one that is subject to repurchase by the company.  The company’s right to repurchase the stock lapses over time according to a vesting schedule – called reverse vesting.  The individual gets to start a capital gains holding period for the stock and the company keeps the incentive of vesting.  The company also avoids the expense of a 409A valuation, which is required if the company wants to issue options.  Click here to access our downloadable resources.

Please reload

Featured Posts

Use this chart to help determine which entity to use in forming a company.

Choose Your Entity Wisely

February 13, 2017

1/7
Please reload

Recent Posts

February 13, 2017

Please reload

Archive
Please reload

Search By Tags
Please reload

Follow Us
  • Facebook Basic Square
  • Twitter Basic Square
  • Google+ Basic Square