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

Phantom equity

Also called: phantom stock

ELI5

A cash or value promise that behaves like shares but is not ownership.

Used in conversation

“Phantom equity avoids a complex shareholder register.”

Definition

A contractual benefit tied to company equity value without issuing actual shares.

Here “Phantom equity” means: A contractual benefit tied to company equity value without issuing actual shares.

Pitch context

You will see “Phantom equity” 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.