What is Equity Grant?
Equity Grant
An Equity Grant is the formal allocation of stock options, RSUs, or restricted stock to an employee, advisor, or founder by the company's Board of Directors.
Why It Matters for Startups
Governs the legal rights and ownership distribution of the entity; configuring Equity Grant is critical for managing long-term cap table health and alignment during employee recruitment packages and compensation administration.
Detailed Deep Dive
An Equity Grant is a legal transaction that requires board approval. The grant documentation defines the vesting schedules, share classes, and strike prices of option allocations.
Frequently Asked Questions
Q:Who must approve an equity grant?
All equity grants must be formally approved by the Board of Directors to remain legally valid.
Q:What is included in an equity grant package?
Number of shares, share class, strike price (FMV), vesting schedule, and option type (ISO/NSO).
Quick Facts
- CategoryLegal
- Key ApplicationEmployee recruitment packages and compensation administration
Coverage Trend12 Weeks
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