This highly visual guide offers startup founders and employees a "nuts and bolts" view of how stock options and other forms of equity compensation work in early-stage startups.

Throughout this guide numerous mini-infographics illustrate the key concepts founders need to know and show the relationships between stock option grants, vesting timelines, exercise timing, and associated tax implications.

In detail, this Founder's Pocket Guide walks entrepreneurs though the following elements:

Startup Equity Compensation Basics: Sharing Equity with Your Team

The first section of this guide is structured to help founders build a base of understanding about the numerous definitions and terminology related to startup equity compensation and stock options. Topics covered include:

• A brief refresher on startup equity in preparation for delving into the details of stock options and other forms of equity compensation.
• A quick review of how startup equity ownership is shared between the various stakeholder of a startup including the founders, investors, and employees.
• The fundamental mechanics of how startup stock options work, including option grants, exercising, vesting, and selling of stock shares.
• A detailed review of equity compensation terminology and definitions, such as vesting, strike price, fair market value, and spread.
• An explanation of each of the most common types of equity compensation including Restricted Stock, Incentive Stock Options, Non-Qualified Stock Options, and Restricted Stock Units.

Equity Compensation Types in Detail

The next section of this guide reviews each of the most common types of equity compensation, including detailed components such as tax implications, vesting and exercise parameters, and other IRS rules governing the ownership of each equity type. The following equity compensation types are covered:

• Restricted Sto