Not automatically. Unless a contractor signs an invention assignment agreement, they may retain ownership of what they create. Always use written agreements that explicitly assign all IP to the company.

Both give the right to purchase stock at a fixed price, but:

• Stock options are usually granted to employees as compensation.
  
• Warrants are often given to investors, lenders, or strategic partners as part of financing or business agreements.

Yes, but typically through NSOs, RSUs, or phantom equity rather than ISOs. International employees may require country-specific equity plans due to tax and legal differences. Always consult counsel before granting equity outside the U.S.

Not always. While founders begin with control, each financing round introduces new investors with board seats, voting rights, and protective provisions. Some founders implement dual-class stock or other structures to retain control, but most startups rely on alignment with investors rather than super-voting rights.

Dilution reduces your percentage ownership as new shares are issued, but it doesn’t necessarily reduce the dollar value of your stake. If a funding round increases valuation, your smaller percentage may still be worth significantly more in absolute terms.

It depends on the acquisition terms. Options may be assumed by the acquirer, cashed out, or accelerated. Double-trigger acceleration is common, meaning unvested shares vest if the company is acquired and the employee is terminated without cause.

At least once per year, or whenever a major event occurs (funding round, acquisition offer, significant revenue milestone). A current 409A valuation is required to set fair market value for stock option grants and to maintain compliance with IRS rules.

• RSAs (Restricted Stock Awards): Shares are issued upfront, subject to repurchase rights if unvested. Best for founders and early hires when valuation is low.
  
• RSUs (Restricted Stock Units): Shares are delivered only when vesting is complete. Best for later-stage hires when valuation is high.

An 83(b) election allows recipients of restricted stock to pay taxes at grant rather than as shares vest. Founders and early employees almost always benefit from filing, since share value is usually negligible at the start. Missing the 30-day deadline can create significant tax burdens later.

Yes. Even small teams benefit from reserving equity for future hires. Without a pool, you may run into hiring roadblocks or face last-minute dilution negotiations with investors. Most early-stage companies set aside 10–20% of total equity.

• ISOs (Incentive Stock Options): Employees only, potential tax advantages, subject to holding rules and limits.
• NSOs (Non-Qualified Stock Options): Broader eligibility (contractors, advisors, board members), taxed as ordinary income at exercise. Both give the right to buy stock at a set price, but their tax treatment differs significantly.

Both give the right to buy stock at a set price, but their tax treatment differs significantly.

You retain only the shares that are vested at the time of departure. Unvested shares are usually repurchased or forfeited by the company. If you hold stock options, you may need to exercise them within a set window (often 90 days). Some companies extend this window, but it must be negotiated.

Yes, but in small amounts. Typical advisor grants range from 0.1% to 0.5%, usually subject to a vesting schedule of one to two years. Be cautious about over-granting equity to advisors - their contributions are rarely equivalent to those of full-time employees.

Early employees typically receive between 0.25% and 2% depending on their role, experience, and timing. Senior executives may receive more, while junior hires may receive less. Always tie grants to role benchmarks and company stage rather than giving away arbitrary percentages.

There’s no single formula. Many accelerators recommend equal splits to avoid resentment, since the majority of value creation lies ahead. Others prefer contribution-based allocations that reflect past input. What matters most is alignment and trust - and making sure all founder equity vests over time.