How Many Stock Options Should Be Offered?

Start-ups Offer Higher Overall Share Percentages

Stock option offers are tough to predict due to the multitude of factors involved, but simply knowing if a company is new or well-established is information enough. Company potential and risk go hand-in-hand with start-ups, so option packages usually consist of much larger percentages of total shares outstanding than normal.

Experienced Companies Offer Consistency, Less Risk

Experienced companies can't usually offer such big pieces of their stock option pie, but in return they often promise relatively risk-free options with much clearer futures. The overall amount of stock offered is quite small, but this is just a reflection of the value of the company's shares overall.

Bottom Line

Although there are certainly some more effective (albeit much more complicated) ways to breakdown just how many stock options should be offered in a given situation, take a closer look at the company involved to quickly become aware of where things are headed.

References

• mySalary: Stock Option Checklist

Resources

• Business Insider: Everything You Need To Know About Stock Options