What is Restricted Stock Units?
Restricted Stock Units
Restricted Stock Units (RSUs) are equity-based compensation where an employee is promised shares of company stock in the future, subject to vesting and liquidity conditions.
Why It Matters for Startups
Governs the legal rights and ownership distribution of the entity; configuring Restricted Stock Units is critical for managing long-term cap table health and alignment during late-stage startup and public firm employee equity grants.
Detailed Deep Dive
Restricted Stock Units (RSUs) are equity-based compensation where an employee is promised shares of company stock in the future, subject to vesting and liquidity conditions.
Frequently Asked Questions
Q:How do RSUs differ from stock options?
Options give the right to *buy* stock at a strike price, whereas RSUs represent actual shares granted directly once conditions are met.
Q:When do RSUs vest?
Typically over a time schedule, and often require a liquidity event (like an IPO) to convert to liquid shares.
Quick Facts
- CategoryOperations
- Key ApplicationLate-stage startup and public firm employee equity grants
Coverage Trend12 Weeks
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