Every stock option has an exercise price, also called the strike price, which is the price at which a share can be bought.
Non-qualified Stock Options (NSO) are stock options that, when exercised, result in ordinary income tax on the difference between the exercise price and the fair market value of the underlying shares.
In a volatile market, companies may see their stock value drop significantly. This can result in employees and other service providers holding stock options that are “underwater” or “out of…
With special thanks to Jacob Hanna and Blake Martell for their contributions. Issuing option grants to incentivize employees, consultants and advisers is a near universal practice for start-up companies in…
When a company issues options to US employees, there are two types it can choose from: incentive stock options (ISOs), which qualify for special tax treatment under the United States Internal Revenue Code, and non-qualified stock options (NSOs), which do not.
UK review by Ryan Naftulin If you’re negotiating for an equity financing, bridge financing, bank financing, venture debt, or a commercial transaction for your startup, you may be asked to…
After you set up your new company, one of the first legal documents you will be thinking about is an incentive equity plan, sometimes referred to as an “option plan”…
What is an early exercisable stock option? An “early exercisable” stock option is like any other stock option awarded to an employee, consultant, director or other advisor, except that the…
A secondary sale is the sale by an existing stockholder of shares in a private company to a third party that does not occur in connection with an acquisition of the company.
An option grant is a right to acquire a set number of shares of stock of a company at a set price.
Section 409A of the Internal Revenue Code is a complex and often counterintuitive set of tax rules applicable to deferred compensation.
Now that you’ve decided that borrowing money is a better option than doing an equity round, how do you determine the terms of the loan? Venture debt lenders will typically…
Companies generally consider it a good idea for employees to be stakeholders in the business in which they work and believe share-based incentives offer the ability to reward, motivate and…
I get questions all the time from clients who haven’t raised convertible debt before. If my clients frequently ask these questions, no doubt there are scores of others who have…
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