Early Equity Is a System, Not a Number
Most people remember the exact moment equity was offered to them, but very few remember the details of the document it lived in. The scene is almost always the same: the interviews are done, the role feels real, you like the people, and then someone says, “And on equity, we’re thinking…” A number lands on the page. You do quick mental math, imagine a future version of yourself at some higher valuation, and decide whether this feels like enough of a bet to take.
That number settles in fast. It starts to explain your own decision back to you. Months later, when people talk about why they joined, they rarely say it was because they understood the mechanics of the cap table or the board deck. They say they joined because they had “meaningful equity,” and they mean that the number they saw in that first email felt like a fair trade for their time and risk. Recent headlines, like Stripe’s 2024 and 2025 tender offers at a roughly $90 billion valuation or OpenAI’s reported $1.5 million stock packages, amplify that instinct: the story of equity is almost always told as a before‑and‑after transformation, not as a series of structural decisions that unfold over years.
It helps to play one of these situations out in your head. You’ve met a founder, a couple of peers, and someone from another function who tells you how “cross‑functional” the work is. The calls blur together, but you like the intensity and the sense that the company is playing on the right important problem. When the offer arrives, you scan salary, glance at title, and then slow down on the equity section. The number has just enough zeroes to make you feel taken seriously and just few enough that it still feels plausible. Someone walks you through a quick upside story: “If we ever traded at something like Stripe’s multiple, this would be worth…” or “Companies like ours that make it to IPO usually land in the X to Y range.”
In that moment, you’re not modeling future dilution, liquidation preferences, or 409A updates. You’re deciding whether you want to be inside the story this number is attached to.
The first time that story and the underlying system diverge is often when the company raises a new round. A deck goes around before the all‑hands. You scroll through the combined victory lap and investor pitch. One slide covers dilution. Someone says, “Everyone got diluted, but the company is worth a lot more now,” and this is technically true in the narrow sense that more capital came in at a higher nominal valuation. You don’t see any warning flashing on your equity dashboard. Your option count hasn’t changed. It is easy to file the whole thing under “good news” and move on.
What actually changed is more subtle. The company created new shares, often with new preferences and protections, and rearranged the relative claims different groups have on future outcomes. Your percentage of the company went down. The mix of people and institutions that need to be satisfied in any exit went up. Over the last couple of years, this has been happening alongside something even less visible to most employees: 409A valuations and internal fair‑market pricing being nudged up or down to keep offers competitive, even as external fundraising announcements try to hold a certain line. Companies have announced “flat” or “up” rounds while quietly cutting common valuations to reduce option costs, or they’ve kept reported valuations high while accepting stricter terms from new investors. None of that shows up in the simple number you first remembered.
Then the company starts hiring into a new phase. What used to be a loose collection of builders turns into org charts. Senior roles arrive at “market” for a world that looks very different from the one you joined. Someone in a new VP seat mentions their equity in passing, and you realize they are holding a meaningfully larger grant than you with less personal risk. At the same time, macro data is sending mixed signals: compensation work for 2025 shows salaries for in‑demand roles, especially in AI, trending up again, but the median equity grants for many roles are noticeably smaller than they were at the 2021 peak. A handful of AI companies now advertise stock packages that, on paper, rival early FAANG; across the rest of the market, “ownership” often looks a little thinner than it used to.
It’s not that anyone lied to you at offer stage. It’s that the reference frame shifted. The equity system is now being tuned for a different problem—keeping specific people from leaving, aligning a more complex org, reacting to a slower IPO market—than the problem it was trying to solve when you signed. Coverage of the slower IPO pipeline has emphasized the same pattern: companies are staying private longer, tender offers and secondaries stand in for exits, and equity has to stretch across a decade instead of three or four years. Stripe’s recurring tenders, SpaceX’s secondary rounds, and similar programs are all different answers to the same question: how do you keep early and mid‑tenure employees engaged when the traditional “four years then ring the bell” script no longer fits.
Eventually, the refresh cycle arrives. Some colleagues get top‑ups. Others are told they’re “already well‑positioned.” The criteria for who gets what are a mix of performance, level, retention risk, and budget, but by the time those filters are applied, they can feel opaque from the outside. Equity, which once felt like a simple reward for being early, now looks more like an ongoing negotiation between the company’s evolving priorities and its ability to retain specific people. If you joined on the original story—“this is the grant that will make it worth it”—it is easy to look at a refresh you didn’t get, or a tender you weren’t eligible for, and feel like something has been taken away.
What’s really changed is not the existence of your grant but the context around it. At the time you joined, you probably pictured a fairly straight line: grant → vesting → IPO or acquisition → payout. In reality, the line bends. New rounds add senior capital above you. Repricing exercises reset what “cheap” looks like. Compensation reports and commentary make it clear that “market” is now a moving target shaped by AI hiring wars, 2023–2025 layoffs, and a much narrower set of companies that can offer the sort of outlier equity people talk about at dinner. Along the way, each adjustment—new money in, new people on, new programs for liquidity—quietly redefines what your original number really represents.
The mistake most people make is treating equity like salary. Salary is meant to be mostly legible: bands, levels, adjustments that can be explained in a manager packet. People get angry when it moves unpredictably, so companies design it not to. Equity is built for a messier world. It has to absorb changes in the fundraising environment, investor expectations, hiring conditions, and public markets. It is not trying to be fair in the same way salary is; it is trying to be usable as a tool for steering behavior and keeping specific people around. That is why it moves in larger, more irregular steps and why, in a year like 2025, it can simultaneously shrink for many and explode for a select few.
Once you start to see equity as a system instead of a static number, the questions you ask change. “How many options is this?” turns into “What tends to happen to employee equity here when the company raises at a higher valuation? At a flat or down one?” “What’s the philosophy around refresh grants?” “Have we done tenders or secondaries before, and who are they usually for?” “What happened to people’s equity in previous reorganizations or pivots?” You won’t always get perfectly satisfying answers, but the act of asking tells you more about how your number will age than the number itself ever can.
Most of the disappointment people feel around equity is really disappointment that the story in their head never got updated as the company moved through different eras. They kept carrying an offer‑day snapshot while everyone else was watching a moving picture. Early equity is not a fixed promise. It is a starting position inside a machine that will keep being tuned as capital, talent, and markets shift.
Equity doesn’t deceive. It just doesn’t explain itself, and in a market where Stripe can run billion‑dollar tenders without going public and OpenAI can pay an average stock package larger than many startups’ entire payroll, that silence leaves a lot of room for people to misread what their number really means.
