Hacker News new | ask | show | jobs
Ask HN: Is it correct to refer to stock options as “equity”?
3 points by thrt23049away 1252 days ago
3 comments

Putting aside whether or not options are objectively definable as equity (I think that's a really tough nuanced question with no real objective answer) I think the biggest barrier between considering something to be equity or not ought to be what the vesting schedule is.

If there's a chance you can be screwed out of your "equity" (whether you consider that to be stock or options) by being let go or through some other trickery just before you reap the benefit, maybe that's the biggest characteristic of whether or not something is actually "equity".

I can offer you the equity of a billion dollars for being my employee in 10 years, but it doesn't matter if I'm planning on firing you in 7 years.

In casual conversation, or in a specific legal/regulatory context, or what?

Are the "stock options" something that one of the founders said over beers that they'd give to everyone next year, or signed-and-notarized-and-your-lawyer-says-it's-ironclad paperwork in your hands, or somewhere in between?

(What? No, I've never been burned on this. /s)

Example context: a company saying they offer "equity" in a job description, and then later specifying they mean stock options, not stock.
Literally - in that case the answer to your "Is it correct..." is "ask a lawyer in the relevant sub-specialty and jurisdiction".

Practically - unless you're a real C-suite insider, "options" have a lot more ways to be worthless than actual stock shares. I'd innocently ask for details - then either run those past a lawyer before agreeing to anything, or just assume that the options were worthless.

It’s a derivative of an equity, which I believe most consider an equity as well.