Equity Grant
How to review a stock option or equity grant
An equity grant can be worth a lot or almost nothing, and the difference usually sits in the fine print of the grant notice and plan. Start with the basics: number of shares, share class, type of award, exercise price, and vesting schedule with any cliff. A share count means little on its own, so ask what percentage of the fully diluted company it represents. Then read what happens when you leave. A short post-termination exercise window can force you to pay the exercise price and tax quickly or lose vested options. Check whether vesting accelerates on a sale or termination, and whether it needs one trigger or two. Repurchase rights, forfeiture for competing, and transfer restrictions can take back value you thought was yours. Employees and founders can upload a grant notice, option agreement, or plan PDF, DOCX, or TXT to Contract Analyzer for a structured score, verdict, findings, missing clauses, and key terms. The report is informational only, not legal or tax advice, so take tax questions to a professional before you act.
Red flags
Watch for these issues in an equity grant.
- Share count with no way to work out your percentage of the company
- Exercise window of 90 days or less after you leave
- No acceleration if the company is sold and your role is cut
- Company can repurchase vested shares at cost or at a low formula price
- Forfeiture of vested equity for vague “competition” or “detrimental activity”
- Vesting can be paused or changed if you go part time or take leave
- Promised grant that still depends on board approval with no date
- Plan terms the company can amend without your consent
Red flags are starting points, not automatic deal-breakers. Context matters: a harsh clause may be negotiable, industry-standard, or offset elsewhere in the document. Use them to prioritize what you verify next — then confirm the exact wording in your file. For a general pre-sign frame, see the contract checker checklist.
Key clauses
Clauses worth locating before you commit.
Knowing the clause names helps you search the PDF and ask sharper questions. If a listed clause is absent, that absence itself may be the finding — especially for termination, liability, payment timing, or confidentiality scope.
Contract Analyzer surfaces many of these as findings or missing-clause notes in a structured report. Learn more about the method on what contract analysis is and how the product compares to enterprise tools on contract analysis software. Credit costs are explained on pricing; deeper explainers live on the blog.
Related types
Explore similar agreements.
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A short letter that states the role, pay, start date, and conditions of a job offer, often pulling in longer agreements by reference.
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An employment agreement that sets pay, duties, benefits, and the rules that govern the job relationship.
Severance Agreement
A separation agreement that trades severance pay or benefits for releases, ongoing restrictions, and exit terms.
Partnership Agreement
A business partnership contract that allocates ownership, contributions, decision rights, profits, and exit rules.
Consulting Agreement
A consulting contract that covers advisory scope, fees, independence, IP, and confidentiality between client and consultant.
FAQ
Questions about equity grant review
What is a typical vesting schedule?
Four years with a one-year cliff is common at US startups: nothing vests in the first year, then a quarter vests at once and the rest vests monthly or quarterly. Check what your grant actually says.
What is a post-termination exercise window?
It is the time you have to buy vested options after leaving. Ninety days is common, though some companies offer much longer. If you cannot afford the exercise price and tax in time, you can lose the options.
What is the difference between single and double trigger acceleration?
Single trigger vests shares on one event, such as a sale. Double trigger needs two, usually a sale followed by losing your job. Double trigger is more common for employees.
Do I need to file an 83(b) election?
It can matter for restricted stock and early exercised options. In the US it must be filed with the IRS within 30 days, and a missed deadline generally cannot be fixed. Ask a tax professional right away.
Can Contract Analyzer value my equity?
No. It reviews the terms and flags risks in an informational report. It cannot tell you what shares are worth or give tax advice.
Ready to review an equity grant?
Create an account, buy a credit pack, upload your document, and get a structured report with findings and quotes. Not legal advice.