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

Exercise

Also called: option exercise

ELI5

Use the option and pay to buy the shares.

Used in conversation

“The employee exercised vested options before departure.”

Definition

The act of using an option or warrant to purchase shares.

Here “Exercise” means: The act of using an option or warrant to purchase shares.

Pitch context

You will see “Exercise” 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.

Sources & evidence · 5

Direct term-level sources and supporting source families.