Business Pitch Dictionary by pitch.dog
Founder & employee equity · Core

Employee stock option

Also called: employee share option, stock option

ELI5

An employee can buy company shares later at a fixed price.

Used in conversation

“The employee stock option is subject to four-year vesting.”

Definition

A right granted to an employee to buy shares at a stated exercise price, subject to vesting and terms.

Here “Employee stock option” means: A right granted to an employee to buy shares at a stated exercise price, subject to vesting and terms.

Pitch context

You will see “Employee stock option” in fundraising decks, data rooms, term sheets and investor conversations when the discussion reaches founder & employee equity.

Why it matters: In founder & employee equity, a loose definition can change rights, obligations, approval, disclosure or enforceability.

Caution

Meaning, enforceability and required process vary by jurisdiction and agreement; this definition is not legal advice.

Connected terms

  • Stock optionThe search label “stock option” can route to both entries.
Sources & evidence · 5

Direct term-level sources and supporting source families.