Stock Option Calculator
See what your startup stock options could be worth at different exit valuations. Model your vested options, exercise cost, and after-tax proceeds across five exit scenarios.
Your option grant
In the money - $1.50 per option intrinsic value
Company details
Value at exit scenarios
Based on 5,000 vested options, after 35% tax
Small exit
$12.50M exit - $1.25/share
$813
after tax (vested)
Moderate exit
$25.00M exit - $2.50/share
$5K
after tax (vested)
Good exit
$50.00M exit - $5.00/share
$13K
after tax (vested)
Great exit
$125.00M exit - $12.50/share
$37K
after tax (vested)
Exceptional exit
$250.00M exit - $25.00/share
$78K
after tax (vested)
Current paper value
$15K
intrinsic value today
Exercise cost
$10K
to buy all options
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Start Free TrialUnderstanding your startup stock options
Stock options give you the right to buy shares in a company at a fixed price - the strike price or exercise price - at a future date. If the company grows and the share price rises above your strike price, your options become valuable. If the company is sold or goes public at a price above your strike, you can exercise your options and sell the shares for a profit.
The catch is that options are not cash. They only have value at a liquidity event - a sale, IPO, or secondary transaction. Until then, they are paper wealth that can disappear if the company fails, is sold below your strike price, or if you leave before your options vest. Understanding the realistic range of outcomes before you join a startup is one of the most important financial decisions you will make.
ISOs vs NSOs: the tax difference
Incentive Stock Options (ISOs) are taxed at capital gains rates if held for more than two years from grant and one year from exercise. Non-Qualified Stock Options (NSOs) are taxed as ordinary income at exercise. Most employees receive ISOs. Most advisors and contractors receive NSOs. The tax treatment significantly changes your net proceeds - an ISO held long enough can save 15-20 percentage points in tax versus an NSO.
The 90-day exercise window
Most option agreements give you 90 days after leaving a company to exercise your vested options. If you do not exercise within that window, you lose them. For early employees with a low strike price, this creates a real decision: pay to exercise and hold illiquid shares, or walk away. Some companies have extended this window to 5-10 years as a retention and talent strategy - ask about it before accepting an offer.
Fully diluted shares matter
Your ownership percentage should be calculated on a fully diluted basis - including all outstanding options, warrants, and unconverted SAFEs or notes. A company may offer you 10,000 shares out of 10 million outstanding, implying 0.1%. But if there are 5 million additional options reserved in the option pool, your real diluted ownership is 0.067%. Always ask for the fully diluted share count, not just the shares outstanding.
Frequently asked questions
- How do I calculate what my stock options are worth?
- The gross value of your options at exit is: (exit price per share minus strike price) multiplied by the number of options you hold. The exit price per share is the acquisition price or IPO price divided by the total number of fully diluted shares. From the gross value, subtract your exercise cost (strike price multiplied by options) and apply your applicable tax rate to get your net proceeds. This calculator does all of that automatically for multiple exit scenarios.
- What is a strike price in stock options?
- The strike price (also called the exercise price) is the fixed price at which you can buy shares when you exercise your options. It is set at the fair market value of the common stock on the date your options are granted - determined by a 409A valuation. If the company is worth more when you exercise than when you were granted, your options are 'in the money' and profitable. If the company is worth less, your options are 'underwater' and have no intrinsic value.
- What does it mean for options to be underwater?
- Options are underwater when the current share price is below the strike price. If your strike is $2.00 per share and the company's current 409A valuation implies $1.50 per share, your options have no intrinsic value - exercising them would cost you more than the shares are worth. This often happens after a down round. Underwater options are still potentially valuable if the company recovers, but they provide no current paper value.
- Should I early exercise my stock options?
- Early exercise (exercising options before they vest, often combined with an 83(b) election) can significantly reduce your tax bill if the company grows substantially. By exercising early when the spread between strike price and FMV is minimal, you start the long-term capital gains clock early and potentially reduce your AMT exposure. The risk is that you pay real cash for shares in a company that may fail. Early exercise makes most sense in the first 30 days after joining, when the spread is zero or near-zero. Consult a tax advisor before making this decision.
- How much equity should I ask for at a startup?
- It depends on the stage, your seniority, and the company's valuation. At seed stage: a VP-level hire might expect 0.5-1.5%, a senior engineer 0.25-0.75%, a mid-level hire 0.1-0.4%. At Series A, these numbers compress by roughly half. At Series B and beyond, typical grants are in basis points (0.01-0.1%). Always evaluate the offer in dollar terms at a realistic exit valuation, not just as a percentage. A 0.5% grant at a $500M exit is worth $2.5M gross - before tax and exercise costs.
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