What should I check in the equity and stock options section of my job offer?
The short answer
The equity section of a job offer contains several terms that can significantly affect the value of what you receive — and how much of it survives a layoff. The most important items to check are: the vesting schedule and cliff (how quickly you earn equity and whether you forfeit everything if you leave before the cliff date), the exercise price (what you pay per share for options), the post-termination exercise window (how long you have to exercise options after leaving), and whether any vesting acceleration clause applies on involuntary termination or acquisition. Many workers joining startups or growth companies focus on the grant size and underestimate these structural terms — which often determine more of the realized value than the headline number. Scan your offer's equity section to understand what vesting, cliff, and post-termination terms you are agreeing to before signing.
What Dang reviews here: Dang reviews the clause language in your employment agreement and offer letter — what the equity, vesting, non-compete, and non-solicitation terms say and what to ask about them. It does not verify tax treatment, investment value of equity grants, or wage, hour, or leave compliance.
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What equity and option clauses usually cover
Equity grants in offer letters are typically described at a high level — number of shares or options, grant date, and vesting schedule — with the formal terms in a separate equity plan document and grant agreement. The vesting schedule defines how quickly you earn the equity: a four-year vest with a one-year cliff means you earn nothing until the first anniversary, then 25% at once, then monthly or quarterly for the remaining three years. Missing the cliff by one day means zero equity from the grant.
The exercise price (for options) is the price you pay per share to convert options into actual shares. The post-termination exercise window is how long you have after leaving — voluntarily or involuntarily — to exercise vested options before they expire: windows of 30, 60, or 90 days are common and mean that unvested options are only part of what you might lose in a layoff. Whether any acceleration applies — single-trigger (on acquisition) or double-trigger (on acquisition and termination) — is typically in the grant agreement, not the offer letter, and is worth specifically requesting for review.
Why people worry
Equity is frequently cited as a major reason for accepting a role, particularly at startups or growth companies where the upside can be significant. Workers report focusing on grant size and later discovering that a one-year cliff cost them all equity after 10 months, that a 90-day exercise window required immediate cash they did not have, or that a layoff in the sixth month of a four-year vest forfeited the entire grant. Understanding the structural terms before signing is the way to assess what the equity offer is actually worth.
What to look for in your offer and grant documents
- Vesting schedule and cliff: the total vesting period, the cliff date, and what the schedule looks like after the cliff.
- Exercise price: for options, the per-share price and whether it reflects a recent 409A valuation.
- Post-termination exercise window: how long after leaving you have to exercise vested options — and whether this window is the same for voluntary resignation and layoff.
- Acceleration provisions: whether any acceleration (single or double trigger) applies on acquisition or termination without cause.
- What happens to unvested equity on layoff — whether any acceleration or extended exercise window is offered.
Questions to ask before signing
- Ask the employer to confirm the specific vesting schedule, cliff date, and post-termination exercise window in writing.
- Ask the other party to clarify whether any acceleration applies in a layoff scenario — and under what conditions.
- Confirm whether the exercise price reflects the most recent 409A valuation and when that valuation was done.
- Consider having the equity grant documents — not just the offer letter summary — reviewed before signing if equity represents a significant portion of compensation.
Why scan instead of guess
The general rule tells you the baseline. Your offer tells you what you’re actually being asked to sign — and the wording is what binds. Dang reads the document and flags the clauses worth reviewing, in plain English.
The deterministic engine scores and decides what’s risky. The AI only enriches the plain-English wording — AI extracts, code decides, never the other way around.
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Common questions
What is a vesting cliff and why does it matter?
A cliff is the date before which you earn no equity at all — typically one year into a four-year vest. If you leave or are laid off before the cliff, you forfeit the entire grant. After the cliff, you earn a portion immediately (often 25%) and the rest vests on a schedule. The cliff date is one of the most financially significant terms in an equity offer.
What happens to my equity if the company is acquired?
It depends on the equity plan documents and whether any acceleration provision applies. A single-trigger clause accelerates vesting on acquisition alone; a double-trigger requires both an acquisition and a subsequent termination. Many standard agreements include no acceleration, meaning unvested equity is treated according to the acquirer's terms. The grant agreement is the document where these terms appear.
No account required · File deleted after analysis · Not legal advice. Dang reports contract findings in plain English — general information, not legal advice about your situation. For consequential decisions, consult a licensed attorney in your state.