How to think about equity at Series B vs Series D
The same equity offer is worth radically different things at different company stages. Most candidates evaluate the headline number and miss the four variables that actually determine what their grant will be worth.
A candidate we worked with last year received two written offers in the same week - one from a Series B fintech, one from a Series D AI infrastructure company. The Series B offer carried 0.4% equity. The Series D offer carried 0.06%. The Series B headline looked materially better. The Series D was almost certainly worth more.
Equity is the single most-misunderstood part of senior-IC and leadership compensation in our markets, and it is misunderstood in a predictable way. Candidates compare the headline percentage; they should be comparing four other things.
I - What does the grant represent at the current valuation?
The most important calculation, and the one most candidates do last. “0.4% of $80M post-money is $320k. 0.06% of $1.4B post-money is $840k.” The Series D candidate is being granted, on paper, more than twice the dollar value of equity at the moment of grant.
That number is the floor of the conversation - what the grant is worth if the company stays exactly where it is today. Most candidates skip it because percentages feel more concrete than dollar amounts. They are not.
II - What is the realistic upside multiplier?
The harder calculation: what does the grant look like at the firm’s plausible exit value? The Series B firm has more upside-distance to travel - but also more downside risk. The Series D firm has run further but still has meaningful growth room, especially if it is approaching IPO.
A useful framing: assume the Series B firm has a one-in-four chance of reaching a $1B exit (so $4M dollar-value at that point for 0.4%) and a one-in-three chance of being worth zero. Assume the Series D firm has a one-in-three chance of reaching $4B (so $2.4M for 0.06%) and a one-in-eight chance of returning sub-$1B. Run those probabilities and the expected values land closer than the headlines suggest - sometimes with the Series D ahead.
These probability estimates are inherently fuzzy. The discipline is in doing the calculation at all rather than relying on the headline.
III - What is the liquidity path?
A Series B firm’s equity is, in practice, illiquid for most candidates. There is no internal tender, no secondary market depth, and no IPO window for several years at minimum. The grant has real value but it is locked.
A late-stage firm - Series D and onwards - increasingly runs internal tenders. Some have annual secondary-sale windows for vested employees. Some are within 18-24 months of an IPO or strategic event. The same dollar-value grant, with shorter time to liquidity, is mechanically worth more - and meaningfully so for a candidate planning their life around the money.
Ask both firms, directly, what their last 24 months of liquidity events have looked like. The answers vary enormously. Some firms have run secondaries. Some have not. Some plan to. Some are years away from being able to.
IV - What are the terms beyond the headline?
The variables candidates rarely ask about, and that often matter most:
- Vesting schedule. Four-year, one-year cliff, monthly thereafter is the modern standard. Anything different - a five-year vest, a six-month cliff, “milestone-based” vesting - needs to be priced into the offer.
- Strike price. For options, the gap between strike and current share price determines the at-grant value. A grant of options at a strike close to current FMV is materially less valuable than an RSU grant of the same dollar count.
- Acceleration on change-of-control. Single-trigger vs double-trigger. Standard at C-suite, increasingly common at VP. Worth asking about as the firm approaches a likely event.
- Tax treatment. ESOP rules in Australia differ from US ISO/NSO regimes. The treatment of your grant at exercise or sale can swing the net result by 20-40%. Get an accountant before you sign, not after.
What we tell candidates
When a candidate comes to us comparing two offers across stages, the first thing we do is build a one-page table:
- Base salary
- Total cash (base + bonus + super)
- Equity dollar value at grant (at current valuation)
- Equity dollar value at a realistic 3-year exit assumption
- Vesting schedule and any acceleration
- Liquidity path and timeline
- Tax treatment at exercise/sale
It takes 45 minutes. It is the most useful 45 minutes you will spend in the offer process.
The firms that explain their equity offer in this detail tend to be the firms worth joining. The firms that resist the question, or that have not thought through their own answers, tend to be the firms where the grant is worth less than it looks.
The Series B candidate took the Series B offer. They had a 12-month-old child and could not justify the variance of late-stage outcome math. That was a perfectly defensible decision - but it was a different decision than they thought they were making when they were only comparing 0.4% to 0.06%. The work is to make the decision with the right numbers in front of you, not to maximise any single one.