Tactical Audit: Finding the Real Worth of Your Stock
It’s a common mistake to see the "estimated value" of stock you are offered and treat it like money you will definitely receive as part of your salary each year. When someone tells you your stock is worth a lot of money, you automatically add that figure to your yearly pay. You then compare that total number against a higher cash offer from another company, thinking you've found a huge financial benefit.
The truth is you can't pay your bills with shares you don't actually own yet. By treating wealth shown on paper as real cash, you create a big problem between what you expect and what you actually have. This leads to a type of burnout where you feel "rich" on paper but still struggle with real bills.
Eventually, you might feel stuck in a bad or slow-moving job because you are waiting for a payment that might never happen.
To get your power back, you need to stop basing your future on things that might happen. You need to carefully look at your offer to set a baseline value of zero for the stock.
This means you should judge a job only on the cash you are guaranteed to get and the chances you have to grow professionally. Treat the stock like a speculative chance to win the lottery. Here is how to remove the sales talk and see what your offer is really worth.
What Is Equity Compensation?
Equity compensation is a non-cash payment that gives employees partial ownership of a company through shares or the right to buy shares. Unlike salary, it has no guaranteed value — the payout depends entirely on whether the company grows, gets acquired, or goes public. For most startup employees, it never converts to cash.
The two most common forms are stock options and restricted stock units (RSUs). They work very differently, carry different tax implications, and suit different company stages. The table below shows the key distinctions.
| Feature | RSUs (Restricted Stock Units) | Stock Options (ISO / NSO) |
|---|---|---|
| Who gets them | Employees at later-stage or public companies | Employees at early-stage startups |
| Upfront cost to own | None — shares are granted automatically when they vest | You must pay the exercise (strike) price to own shares |
| When you pay tax | At vesting — taxed as ordinary income on the share value that day | NSOs: taxed at exercise. ISOs: taxed at sale, but may trigger AMT |
| Value floor | Always worth something as long as the stock has any value | Worthless if the stock price falls below your strike price |
| If you leave | Unvested RSUs are forfeited; vested shares are yours | You usually have 90 days to exercise vested options — after that, they expire permanently |
| Bottom line | More predictable value, lower upside potential | Higher potential upside with more risk, cost, and complexity |
Main Points to Remember
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01
Change Your Thinking Stop seeing equity as a "Lottery Ticket" and start viewing it as an "Investment Portfolio." Don't just think of shares as a "gift" or a lucky guess. Look at your shares as a true part of what you earn and judge the company’s actual health as if you were an outside person putting your own cash on the line.
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02
Change What You Do Move from "Just Accepting the Number" to "Checking the Ownership." Don't just look at the total number of shares given; that number means nothing by itself. Focus on the actual percentage of the company you own and the current price of a share to see what the offer is actually worth in the real world.
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03
Change Your Power Stop "Trusting HR's Sales Pitch" and start "Using Your Own Simple Math." Shift from believing the recruiter's best-case ideas to doing your own money calculations. Use easy tools to figure out how much you actually take home in different situations so you can decide based on facts instead of just wishing.
Checking Compensation: Spotting Hidden Issues
Check #1: The Fake Paper Wealth Idea
You calculate your total pay by adding the "expected value" of your stock options to your base salary. You use this total number to justify taking a lower salary or taking on new personal loans.
Stock options are a speculative "chance to buy," not cash you can use or money you are guaranteed to get. Until a company sells or goes public, the value on your offer is just a guess that can't pay your bills or buy things.
The Zero-Value Starting Point
Judge the offer based only on the guaranteed salary and immediate benefits. If the cash part isn't enough for your needs or what the market pays, don't count on "future" stock to make up the difference.
Check #2: Missing the Big Picture Number
You feel secure because your offer letter gives you a big, specific number of shares (like 50,000 shares) without knowing what part of the company that actually is.
The total number of shares is just a number that looks good but tells you nothing about your real ownership share. If you don't know the total number of shares that exist, you can't figure out if your grant is a meaningful piece of the company or just a tiny fraction.
Ask for the Ownership Percentage
Ask the manager or HR for the total number of shares that exist in the company (fully diluted). Use this to find your ownership percentage. Then, use this percentage to guess what you'd get paid in likely sale situations so you know what the company needs to be worth for your shares to matter.
Check #3: The Trap That Keeps You Stuck
You stay in a job that is boring or stressful mainly because you are waiting for your next set of shares to become officially yours, afraid that leaving means "losing" a large future fortune.
Most startup stock never reaches a point where it can be sold for cash. According to research published by Harvard Business School, approximately 75% of venture-backed startups fail to return investor money — and employees holding common shares, which rank below preferred investors at exit, face even lower realistic odds. By staying in a job only for the stock, you often give up real chances for career improvement and higher cash salaries elsewhere for a payment that might end up being worthless.
Calculate the Cost of Staying
Compare the estimated money you'd get from your unvested shares (after taxes) against the salary raise you could get by moving to a new job right now. If a new job gives you a clear cash raise and better ways to grow, the "lottery ticket" of your current stock is usually not worth staying in a job that isn't helping you advance. See how to negotiate your full compensation package before making that call.
The Stock Ownership Plan
Gathering the Facts (First 2 Days)
Stop looking at the dollar value the recruiter suggests. That number is usually a guess based on future hopes, not what things are like now. You need the basic facts to make your own money plan.
- Ask the "Stock Type": Find out if you are getting RSUs (which are like actual shares) or Stock Options (the right to buy shares later). This changes how you pay taxes and how much money you need to spend upfront.
- Ask for the "Total Shares Out There": Knowing you have 10,000 shares is useless if there are 100 million shares in total. You need to know your ownership percentage (for example, 0.01%).
- Get the "Buy Price": If you get options, ask for the current Market Value (FMV). This is the price you will have to pay later to "buy" your stock.
- Confirm Ownership Level: Ask if your shares are "Common" stock (normal for employees) and if the people who invested first get paid before you do if the company sells (Liquidation Preference).
Mapping Out the Schedule (First Week)
Stock is a long game, not a quick win. You must draw out exactly when these shares will legally become yours. This stops you from feeling stuck in a job you dislike just because you misunderstood the schedule.
- Find the "Waiting Period": Most offers require you to work for one year before any shares are yours (the cliff). If you leave before month 11, you get nothing. Mark this date clearly.
- See the "How Often Vesting Happens": After the first year, do you get shares monthly or every three months? Usually, it's over 4 years total. Make a simple chart showing how many shares you will own at the 1-year, 2-year, 3-year, and 4-year marks.
- Check the "Use-By Date": If you leave the company, how long do you have to buy your options? Some give you 90 days; others give you years. This is very important for your exit plan.
Testing Your Limits (Before You Sign)
Run three different money checks to see if the risk is worth the possible reward. Do not trust the company’s high hopes for success.
- Test A (The Worst Case): Assume the company fails or the stock price never goes above what you have to pay for it. Is the base salary alone enough for your living needs and career goals? If not, the offer is too risky.
- Test B (The Likely Sale): Look up the company's recent valuation. Figure out what you would get paid if the company sells for double that amount. Subtract the cost of buying the shares and about 30% for taxes.
- Test C (The Tax Bill): Talk to a tax expert or use an online calculator to understand the "Alternative Minimum Tax" (AMT) costs. Make sure you have enough cash saved up to pay the taxes needed to actually own your shares.
How Cruit Helps You Find Real Worth
For Real Money Facts
Career Guidance ToolGo through hard offers (like stock options) with a personal helper to find things you might be missing about what you are truly worth in the job market.
For Fair Value Check
Job Check ToolCheck if a stock offer is fair by comparing your background details directly against the real market demands for that job.
For Moving Forward
Job Search TrackerSee your entire job search in one clear chart, helping you make choices based on facts to leave slow jobs for real growth.
Common Questions
Does treating equity as zero mean I'm leaving money on the table?
No. Treating equity as zero is a starting point for evaluation, not a final judgment. If the company sells or goes public, you still receive your shares. This approach ensures you don't make major financial decisions — like accepting a lower salary or taking on debt — based on money that isn't real yet. Hope for the upside; just don't build your financial life around it.
How do I negotiate salary when I don't have a competing offer?
You don't need a second offer to negotiate. Focus the conversation on market salary data for your role and level, and the gap between the guaranteed cash offer and your actual financial needs. Pointing out that the base pay falls below market rate for your experience shows the recruiter you're negotiating from facts, not preference.
What should I do if the recruiter only offers more stock?
When a company refuses to raise cash but offers more equity, they're asking you to absorb all the financial risk. Decide whether the guaranteed salary alone — with zero from the stock — covers your needs. If the base offer isn't enough, additional shares in a company that may never pay out won't solve the problem later.
What is a vesting cliff and how does it affect me?
A vesting cliff is a minimum tenure requirement before any shares become yours. Most startup offers use a one-year cliff: leave before month 12 and you own nothing. After the cliff, shares typically vest monthly over three more years. Mark your cliff date before signing — it directly affects any exit plan or job change timeline.
How long do I have to exercise stock options after leaving a company?
Most standard option agreements give you 90 days after your last day to exercise vested options. After that window, they expire permanently. Some companies offer extended post-departure windows of one to ten years, but this is less common. Always ask about the post-termination exercise period before accepting any option grant — it's one of the most important terms most candidates never think to ask about.
Focus on what is real.
Don’t let yourself become someone who is "rich on paper" but can’t pay their bills. When you stop chasing things that might happen, you stop feeling forced to stay in a job because you’re waiting for a payout that may never arrive. Judge your offer on the cash you can spend and the skills you will gain. That’s what keeps you from working for a salary that only exists on paper — and gives you the freedom to leave if the workplace stops serving your growth.
Take a minute to check your current offer today and see what it is actually worth without the sales talk. You deserve a career built on solid ground, not a dream that keeps you standing still.
Check Your Offer
