Common stock is the typical form of employee equity. Common stock is a voting interest in a company. Common stockholders typically have one vote per share of stock, unless there are different classes of common stock. Common stock typically takes a back-seat to preferred shares during a liquidation event. Generally, the two ways to provide common stock to employees are stock options or restricted stock.

startup employees celebrating equity value

Should I Give A Startup Employee Equity?

To give or not to give employee equity, that is the question. One of the first issues startups deal with is how they plan on compensating key personnel. For startups with limited funds, there may not be many options. The want or need to issue equity really depends on your startup’s short and long term goals, as well as its financial capabilities.