Equity Incentives

Granting options vs. issuing restricted stock


is almost always issued to founders when the company is formed. Most early stage companies prefer to limit the number of shareholders who have the right to vote and therefore tend to instead options to non-founders. Also, because recipients of must pay the fair market value of the stock up-front (as opposed to options where they wait to pay for the shares until they exercise the option) it becomes more and more expensive to purchase as the company increases in value. As a result, most private companies will instead options to non-founder employees, consultants, advisors and directors. 

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