Equity & Ownership

The structural mechanics of who owns what. This cluster covers cap tables, stock classes (common, preferred, restricted), options (ISO, NSO, exercise mechanics), vesting and acceleration, anti-dilution provisions, preferred stock terms (preferences, ratchets, protective provisions), SAFEs and warrants, equity tax planning (83b, QSBS, AMT), and the administrative infrastructure (cap-table software, equity admin) that keeps it all clean. 80 entries.

This is the most consequential cluster for founder economics. The decisions here echo across every future round and exit.

Cap tables and ownership math

• Cap Table, single source of truth for ownership.
• Cap Table Software, Carta, Pulley, AngelList Equity.
• Dilution, how ownership percentage shrinks.
• Pre-money vs Post-money Valuation, the option-pool trap.
• Authorized Shares, shares the company can issue.
• Issued Shares, shares actually granted.
• Outstanding Shares, shares held by investors/employees.
• Fully Diluted Shares, the view investors use.
• Treasury Stock, shares the company has repurchased.

Stock classes

• Common Stock, founder and employee equity.
• Preferred Stock, investor equity with rights.
• Preferred vs Common Stock, what's different.
• Restricted Stock, shares subject to vesting.
• Restricted Stock Units, RSUs; later-stage equity.
• Phantom Equity, cash-settled equivalents.
• Profits Interests, LLC-specific equity.
• Founders Stock, formation-stage common stock (structural).
• Founder Shares, formation-stage common stock (tax characteristics).
• Startup Equity, overview of equity types.

Stock options

• Stock Option, right to buy stock at strike price.
• Incentive Stock Option, ISO tax-advantaged option.
• Non-Qualified Stock Option, NSO; more flexible, less favorable tax.
• Option Grant, issuing options to employees.
• Option Exercise, converting options to shares.
• Option Strike Price, purchase price set by 409A.
• Cashless Exercise, exercise without cash outlay.
• Early Exercise, exercising before vesting.
• Post-Termination Exercise Window, PTEW timing.
• Option Modification, changing terms post-grant.
• Option Pool, reserved equity for employees.
• Option Pool Refresh, refilling the pool at rounds.
• Option Pool Shuffle, the pre-money pool negotiation.
• Employee Stock Purchase Plan, ESPP for later stage.
• Equity Incentive Plan, the formal plan document.

Vesting

• Vesting, the standard 4-year schedule.
• Cliff (Vesting Cliff), the binary 12-month threshold.
• Reverse Vesting, when issued stock becomes subject to vesting.
• Vesting Acceleration, speed-up provisions.
• Single Trigger Acceleration, change of control alone.
• Double Trigger Acceleration, change of control + termination.
• Repurchase Rights, company's right to buy back.
• Transfer Restrictions, limits on selling shares.
• Consent Rights, who must approve transfers.
• Founder Clawback, reclaiming founder equity.

Anti-dilution and preferred terms

• Anti-Dilution Provisions, protecting preferred at down rounds.
• Broad-Based Weighted-Average, standard anti-dilution.
• Weighted-Average Anti-Dilution, the broader category.
• Full-Ratchet Anti-Dilution, aggressive anti-dilution.
• Liquidation Preference, preferred-stock exit math.
• Participating Preferred, double-dip preference.
• Non-Participating Preferred, clean 1x preference.
• Protective Provisions, investor veto rights.
• Supermajority Vote, elevated approval thresholds.
• Voting Rights, board and shareholder votes.
• Preemptive Rights, first dibs on new issuances.
• Pro Rata Rights, maintaining ownership percentage.

Registration rights

• Registration Rights, SEC registration for IPO.
• Demand Registration, investor-triggered registration.
• Piggyback Registration, joining the company's registration.
• S-3 Registration, short-form registration.

SAFEs, notes, and other instruments

• SAFE (Simple Agreement for Future Equity), YC's standard pre-seed instrument.
• Convertible Note, debt that converts to equity.
• Valuation Cap, max valuation for SAFE conversion.
• Warrant, option-like instrument, often for debt.

Equity tax planning

• 83(b) Election, the 30-day deadline.
• Early Exercise Tax, tax implications of pre-vest exercise.
• ISO AMT Implications, alternative minimum tax on ISO exercise.
• Equity Compensation Tax Planning, the discipline.
• Section 1045 Rollover, QSBS rollover for pre-5-year exits.
• Spousal Consent, community property states.
• International Equity Grants, grants to non-US employees.

Corporate-level mechanics

• Certificate of Incorporation, the founding charter.
• Stock Purchase Agreement, the SPA.
• Equity Grant Policy, formal grant standards.
• Equity Administration, operational equity discipline.
• Stock Split, increasing share count proportionally.
• Reverse Stock Split, consolidating shares.
• Share Buyback, company buys back its own stock.
• Catch-Up Distribution, preferred holder catch-up math.

409A and valuations

• 409A Valuation, fair-market-value determination for options.