How do I value startup equity?

Ask for your percentage of fully diluted shares, multiply it by a plausible exit value, reduce it for future dilution, and treat the result as an option on a good outcome rather than money you will have.

What questions should I ask before accepting a startup offer?

Ask for the percentage of fully diluted shares, the strike price and 409A value, the last round’s price per share, the vesting and exercise terms, the runway, and what the next round depends on.

For engineers

How to evaluate a startup offer

The numbers to ask for, how to value the equity without fooling yourself, and the questions that tell you whether the company is worth joining

Zelcast · October 2026

To evaluate a startup offer, compare the base salary with the market, then value the equity separately using your percentage of fully diluted shares, the latest round’s price and a realistic outcome, and treat it as worth much less than its paper value. Then judge the company itself, meaning the founders, the team, the traction and the runway. At an early-stage startup the company matters more than the terms.

Start with the cash

The base salary is the one part of the offer you can count on, so compare it with the market for your level and city. For founding engineers, certified US wage filings put the median base around $162,000, and about $174,000 in California, as covered in founding engineer salary in 2026. Make sure the base works for four years, because a stretched budget pushes people to leave before the equity is worth anything.

Ask for the numbers behind the equity

A share count tells you nothing on its own. Ask for:

the grant as a percentage of fully diluted shares
the strike price and the latest 409A valuation
the price per share in the last round
the vesting schedule, cliff and any acceleration
the post-termination exercise window
whether you can exercise early

Founders who want you to join will share all of it. If they won’t, ask why.

Value the equity honestly

Multiply your percentage by the company’s value at a plausible exit, then reduce it for dilution. Each future round issues new shares, and over several rounds an early stake often shrinks by half or more before the company is acquired or goes public. Most startups don’t reach a large exit, so the honest way to hold the result is as an option on a good outcome.

Judge the company

The same grant can be worth nothing or a great deal depending on the company, so spend more time on the people than on the terms. Meet every founder and as many of the engineers as you can. Ask about revenue or usage, how long the money lasts, and what the next round depends on. If you can, talk to someone who has worked with the founders before, without the founders arranging it. Signs of a great early-stage startup lists what to look for.

Negotiate the right things

Early-stage companies often have more room on equity terms than on cash. A longer exercise window, early exercise and a somewhat larger grant cost the company little now and can matter a great deal to you later, so ask for those before asking for more base.

Common questions

How do I value startup equity?: Ask for your percentage of fully diluted shares, multiply it by a plausible exit value, reduce it for future dilution, and treat the result as an option on a good outcome rather than money you will have.
What questions should I ask before accepting a startup offer?: Ask for the percentage of fully diluted shares, the strike price and 409A value, the last round’s price per share, the vesting and exercise terms, the runway, and what the next round depends on.
Is it better to negotiate salary or equity at a startup?: Early-stage companies usually have more room on equity terms than on cash. A longer exercise window, early exercise and a larger grant are often easier to get than more base.