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Illustration by David Huang

No one — with the possible exception of finance experts — looks at their equity package and thinks, “Yep, makes sense.”

To help clarify, we’ve put together a short glossary of terms you’re likely to see in your offer, along with literal — and more practical — definitions.

1. Four-year monthly vest

You thought you were getting that fat 0.1% equity stake the moment you signed? Think again, friend. You’re going to receive it piecemeal, on a regular schedule referred to as a “vesting schedule.” Think of it as your company’s layaway plan for paying out your equity grant.

Literal Definition: You will receive a fraction of your equity package each month, and if you’re still working there in four years, you will have your entire package. …

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Photo by Dominik Kiss

One of Angela Byron’s first pieces of code, typed on a VIC-20, was a BASIC program that turned a red box blue. From that color-changing square, she would go onto to become a Google–O’Reilly Open Source Award recipient, the first woman ever featured on the cover of Linux Journal, a core contributor to Drupal, and the co-author of an O’Reilly book. She would not, however, get there via the most traditional path.

As a teenager, Byron wasn’t taking college CS courses or studying math textbooks for fun. She was hanging out on a message board run by Chainsaw Records, a Queercore record label from Portland. Byron taught herself Perl, PHP, and MySQL hacking together new features for the community. After graduating high school, she forewent pursuing a CS degree to move to Canada with her girlfriend, where Byron worked a series of jobs, including a stint running IT for multiple Canadian provincial governments. …

Your Equity Could Be Worth Millions — Or Nothing

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Illustration by Meredith Miotke

In 2014, mobile security startup Good Technology was valued at $1.1 billion. Employees thought their equity packages were winning lottery tickets. They were wrong.

One year later, Good sold for $425 million. Employee share prices tumbled from $4.32 a share to $0.44. While executives made millions, employees — some of whom paid $100,000+ in taxes on their equity — made next to nothing.

Good Technology’s situation isn’t uncommon. Like so many startups, it had investors and board members whose equity was protected by high liquidation preference — a guarantee that they get paid first and at least a certain amount when the company sells. …

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