# Equity in an FDE offer: eight questions to answer before you sign

> The biggest part of the pay package is often the vaguest. A few well-chosen questions are enough to turn a share count into something you can actually compare.

Original: https://fdetimes.net/en/analysis/fde-offer-equity-questions/

At top employers, equity can now make up 55–70% of an FDE's total compensation, up from 35–45% in 2024. The figure comes from a 2026 FDE salary negotiation guide on a vendor's blog, so treat it as an indicator only.

The largest part of the offer is also the hardest to read. Base salary is a number with a currency attached. Equity usually arrives as "X shares" or "X options", with no denominator and no word on who gets paid before you.

If you are taking, or aiming for, an FDE role at a startup, this is where one missed question can be worth more than every round of haggling over base salary. The good news is that the questions are few, and asking them works exactly like the customer discovery a good FDE does.

## A share count says nothing on its own

The first question is what percentage the grant represents, on which capital structure and as of what date, as The Startup Law Blog advises. The reason is simple division. The number of shares is the numerator; its value depends entirely on the denominator.

Suppose you are offered 20,000 options. If the company has 10,000,000 fully diluted shares, you own 0.2%. If the figure is 40,000,000, you own just 0.05%, a quarter as much. The same line in the offer letter, two very different values.

So if the company will not tell you the total fully diluted share count, treat the offer as incomplete until it does. That is Underdog.io's firm rule. There is no need to be combative; simply say you cannot compare the offer without the denominator.

**Key point:** An offer without a denominator is an incomplete offer.

The "as of what date" question matters just as much. Dilution is not a theoretical risk but the default path for venture-backed companies that keep raising money, according to Underdog.io.

Nor does the company need employees' consent to dilute them. Today's 0.2% will shrink with every funding round, so build that scenario in from the start.

## Who gets paid before you?

Knowing the percentage is still not enough, because not all shares are paid out in the same order. Ask for the total preference stack: the sum of the liquidation preferences held by preferred-stock investors (Underdog.io). When the company is sold, this is paid first, and employees' common stock gets what is left.

Imagine a startup that has raised 100 units of capital in total, with an equivalent liquidation preference, and is then sold for 120 units. Investors take 100 first.

All the common stock, including your 0.2%, shares the remaining 20 units. If the sale price is only 90, your share is zero, even if the headlines still call it an "exit".

That is why the FDE negotiation guide mentioned above recommends valuing a grant on a fully diluted basis, against both the 409A valuation and the preferred-share valuation. In other words, do not multiply your share count by a single price. Run the numbers at both and look at the gap between them.

## Options or RSUs, and what will it cost you to buy?

Options and RSUs are different instruments. A stock option gives you the right to buy shares at a preset price, called the strike price, while an RSU is a share granted outright (Levels.fyi). With options, your value is the difference between the share price and the strike, not the full share price.

The strike price is what you pay to exercise, that is, to buy the shares. In the US it is anchored to the 409A valuation, so Ledgy advises asking for both the strike and the date of the most recent 409A. An old 409A may no longer reflect where the company stands today.

Anchoring the strike to the 409A is a US mechanism. If your contract is in another country, ask the company directly how the strike is set where you work and when you will owe tax.

## The vesting clock and the 90-day window

The most common vesting schedule is four years with a one-year cliff, according to Ledgy. Leave before the one-year mark and you get nothing. If you are not sure you will stay the full first year in a new role, include a scenario where that equity is worth zero when comparing offers.

The second risk appears when you leave. The post-termination exercise period is typically 90 days for ISOs, but it can stretch to 10 years depending on the company's equity policy (Qapita). Loom is one example: it gives a 10-year window to employees with two or more years of service.

Run the numbers. You have vested 5,000 options with a strike of 2 currency units per share. To keep them, you must put up 10,000 units within 90 days, before tax, to buy shares in an unlisted company.

If you cannot, the options are lost. A 10-year window turns a rushed decision into a choice you have time to weigh.

## When the company is sold, and the 30-day deadline

Do not assume an exit means you get paid in full. An acquisition does not automatically accelerate the vesting of unvested equity unless the grant documents say so explicitly (The Startup Law Blog). Ask about acceleration and read the actual clause in the award document.

Early exercise has its own trap. If you exercise options before they vest, the statutory deadline for an 83(b) election is 30 days from when the shares are actually transferred, and it is generally not extended. This is a deadline to put in your calendar the moment you sign, not something to deal with next week.

Here is the list to send the recruiter before any numbers are discussed:

| Question | Why ask | Warning sign |
|---|---|---|
| What percentage is the grant, as of what date? | The share count is only the numerator | They just repeat the share count |
| What is the total fully diluted share count? | The denominator sets your real stake | They refuse to disclose it |
| What is the total preference stack? | It decides who is paid first at exit | "You don't need to worry about that" |
| Options or RSUs, what strike, what 409A date? | Options are only worth the gap above the strike | The 409A is stale |
| Vesting schedule and cliff? | Leave before the cliff and you get nothing | A longer-than-standard cliff with no explanation |
| Exercise window after leaving? | 90 days can force you to give up your options | Only 90 days, no exceptions |
| Is there acceleration if the company is sold? | It is not automatic | Verbal promises only, nothing in writing |
| Is early exercise allowed? | It triggers the 30-day 83(b) deadline | Nobody can explain the process |

## Ask the way you would ask a customer

Asking these questions is also the opening move of a negotiation. At the same level, RSU grants can differ by $50,000–200,000 over a four-year vesting period, depending on the compensation committee's decision, according to the FDE negotiation guide mentioned above.

That spread is your room to negotiate. But you can only use it once you have converted the grant into a percentage and know who gets paid before you.

The same guide advises negotiating equity first, then everything else. That makes sense when equity is the largest part of the package. With the fully diluted percentage and the preference stack in hand, you are negotiating on data rather than on feel.

The skill here is the skill of the job. An FDE does not accept a request to "integrate the system" without asking about scope, which data and who signs off. You can make that point in interviews: the way you clarify a vague offer is the way you clarify a vague customer requirement.

Read the offer letter as you would a customer specification: wherever the numbers are missing is where you need to ask before you sign.

**Try this week:**

- Draft an email with the eight equity questions (percentage, fully diluted count, preference stack, strike, 409A date, vesting, exercise window, acceleration) ready for your next offer.
- Take an old or hypothetical offer, convert the options into a percentage using two different denominators, then work out the cost of exercising if you had to leave after one year.
- When reading startup FDE job descriptions, note which companies state the type of equity and the vesting schedule, and use that as a filter for where to apply.

## Sources

- [How to Negotiate Startup Equity: A Practical Guide for Employees (The Startup Law Blog)](https://www.thestartuplawblog.com/startup-employee-equity-negotiation/)

- [How to Evaluate Startup Equity Offers Without Getting Burned (Underdog.io)](https://underdog.io/blog/how-to-evaluate-startup-equity-offers)

- [Forward Deployed Engineer Salary Negotiation in 2026: A Data-Backed Guide](https://getperspective.ai/blog/forward-deployed-engineer-salary-negotiation-2026-data-backed-guide/markdown)

- [New Job Offer? These Are the Equity Questions You Need to Ask (Ledgy)](https://ledgy.com/blog/the-equity-questions-you-need-to-ask-when-you-get-a-startup-job-offer)

- [Equity in your tech job offer: everything you need to know (Compound, Levels.fyi blog)](https://www.levels.fyi/blog/equity-tech-job-offer.html)

- [Explaining the post termination exercise period for employees (Qapita)](https://www.qapita.com/blog/post-termination-exercise-period)