Founding Equity
Founding equity is the total ownership package offered to founding-team members. It includes grant size, vesting terms, acceleration provisions, and the class of shares — usually the most generous equity terms in the company.
Summary: How Founding Equity Works
Founding equity is ownership granted to very early startup employees (often 0.25%–5%) as compensation for taking higher risk when the company has little cash, no product-market fit, and a high chance of failure. The earlier and more critical your role, the higher your percentage.
Most founding equity is granted as stock options (ISOs or NSOs) with a standard 4-year vesting schedule and a 1-year cliff. You earn your equity over time; if you leave before the cliff, you get nothing.
Related Terms
Last updated: May 23, 2026