Startup offer letter template (with equity grant)
Startup offer letter template with the equity section that actually converts candidates: options, strike, % fully-diluted, vesting, and the 83(b) deadline.
startup-offer-letter-template-equity.txt
[NOT LEGAL ADVICE. Have a startup lawyer review this letter before you send it. Equity grants are subject to board approval and your company's stock plan.]
{{COMPANY_NAME}}
{{OFFER_DATE}}
Dear {{CANDIDATE_FIRST_NAME}},
We're excited to offer you the role of {{ROLE_TITLE}} at {{COMPANY_NAME}}. The terms are below. Please sign and return by {{OFFER_EXPIRY_DATE}}.
**Title.** {{ROLE_TITLE}}, reporting to {{HIRING_MANAGER}}.
**Start date.** {{START_DATE}}.
**Annual salary.** ${{ANNUAL_SALARY}}, paid bi-weekly, less standard withholdings.
**Equity grant.** Subject to board approval, the company will grant you {{OPTION_COUNT}} incentive stock options at a strike price of ${{STRIKE_PRICE}} per share, set by our most recent 409A valuation. This grant represents approximately {{FULLY_DILUTED_PCT}}% of {{COMPANY_NAME}} on a fully-diluted basis as of the offer date.
**Vesting.** Your options vest over {{VESTING_YEARS}} years, with a {{CLIFF_MONTHS}}-month cliff. After the cliff, vesting accrues monthly. Vesting starts on your start date.
**Post-termination exercise window.** If your employment ends, you have {{EXERCISE_WINDOW}} from your termination date to exercise vested options before they expire.
**Benefits.** Health, dental, and vision coverage from day one. {{PTO_POLICY}}.
**At-will employment.** Your employment is at-will. Either party may end the relationship at any time, with or without cause.
**Conditions.** This offer is contingent on (1) signing the attached Confidentiality and Invention Assignment Agreement, (2) verification of your right to work, and (3) board approval of the equity grant.
---
What your equity actually means
You're being granted {{OPTION_COUNT}} options. Each option gives you the right to buy one share of {{COMPANY_NAME}} stock at ${{STRIKE_PRICE}}. That's the strike price, locked in at today's 409A. If the company is worth more when you exercise (the goal), the gap between the strike and the fair-market-value is your upside.
Your grant equals roughly {{FULLY_DILUTED_PCT}}% of the company on a fully-diluted basis, which includes the unissued option pool and outstanding convertibles. That percentage will go down as we raise more capital. The dollar value of your stake at an exit is what matters, not the percentage today.
83(b) election. If you early-exercise any options, you have 30 days from the exercise date to file an 83(b) election with the IRS. Missing that 30-day window can cost you tens of thousands in future tax. We'll send the form and instructions on day one; do not let it slip.
Questions on any of this, especially the equity, please book a call with {{EQUITY_CONTACT}} before you sign.
Sincerely,
{{HIRING_MANAGER}}
{{HIRING_MANAGER_TITLE}}
{{COMPANY_NAME}}
Accepted:
______________________________
{{CANDIDATE_NAME}} Date
Variables · fill before sending
- COMPANY_NAMELegal entity name, e.g. 'Acme, Inc.' (Delaware C-corp recommended)
- OFFER_DATEDate the letter is sent, e.g. 'June 21, 2026'
- CANDIDATE_FIRST_NAMECandidate's first name for the greeting
- CANDIDATE_NAMECandidate's full legal name for the signature block
- ROLE_TITLEExact title, e.g. 'Founding Engineer'
- HIRING_MANAGERName of the person they'll report to (usually a founder at seed)
- HIRING_MANAGER_TITLEHiring manager's title, e.g. 'CEO and Co-founder'
- START_DATEFirst day of work
- OFFER_EXPIRY_DATESign-by date. 7 days is standard; don't go past 10.
- ANNUAL_SALARYBase cash comp, no commas, e.g. '165000'
- OPTION_COUNTNumber of ISOs being granted, e.g. '150000'
- STRIKE_PRICEPer-share strike from your most recent 409A, e.g. '0.42'
- FULLY_DILUTED_PCTGrant as % of fully-diluted shares, e.g. '0.85'
- VESTING_YEARSStandard is 4
- CLIFF_MONTHSStandard is 12
- EXERCISE_WINDOWStandard is '90 days'. Extended PTEP is typically '7 years' or '10 years'.
- PTO_POLICYOne sentence, e.g. 'Unlimited PTO with a 15-day annual floor.'
- EQUITY_CONTACTWho handles equity questions, usually the CEO or CFO at seed
How to use it
- Get the 409A done first. Don't send an offer that promises options at a strike "to be determined." Candidates read that as risk. Get the 409A valuation booked before you start hiring.
- Show the percentage, not just the option count. "150,000 options" sounds like a lot to someone who doesn't know your share count. "0.85% of the fully-diluted company" is the number that actually compares across offers.
- Spell out the 83(b) deadline. Carta data shows option exercise rates fell to roughly 32% in Q4 2024, partly because employees don't understand the tax mechanics. Putting the 30-day deadline in the letter is the cheapest retention tool you have.
- Default to 90-day PTEP, offer 7+ year extension at senior levels. About 20% of grants carried an extended post-termination exercise period in early 2024. Use it as a senior-hire lever, not a blanket policy.
- Don't promise refresh grants in writing. Verbal commitment is fine. In writing, it becomes a contractual obligation your future board may not want to honor.
- Sign-by date in 7 days. Longer windows let candidates shop the offer. Shorter feels coercive. Seven days is the sweet spot.