Equity grant
An equity grant is an offer of ownership in the company — usually stock options or VSOPs — as part of a compensation package. Vests over time, typically 4 years with a 1-year cliff. Common in EU startups; rare in non-tech SMBs.
The instruments European companies actually use
The terms vary by country and entity structure:
- VSOPs (Virtual Stock Options): most common in Germany. Phantom shares — cash payout at exit, not actual shares. Tax-friendlier than real options under current German law.
- ESOPs (Employee Stock Options): real options to buy shares at a strike price. Common in UK and Nordic startups; tax treatment varies.
- BSPCE (France): French equivalent of options, with specific tax advantages for the employee.
- Phantom stock / SAR: similar to VSOP, used where local law makes real options expensive.
For SMBs hiring across countries, the instrument is often the headache. The candidate cares about the value at exit; the company cares about the legal and tax setup.
What a typical vest looks like
- 4-year vest with 1-year cliff: 25% vests at month 12, then monthly thereafter. Industry standard for startups.
- Acceleration on change of control: 50% or 100% of unvested options accelerate if the company is acquired. Common for early hires, less for late hires.
- Post-termination exercise window: 90 days is the legacy default; 10 years is what most modern startups now offer to make options actually exercisable for leavers.
What candidates should ask
- Strike price and 409A-equivalent valuation: what would the options be worth on exercise?
- Dilution exposure: how much will the equity pool grow over the next few funding rounds?
- Liquidity expectations: is the company on a clear path to an exit or a secondary, or is the equity decoration?