You're choosing between two offers. Both have equity. The numbers look similar on paper. But if you just compare the grant letter numbers, you'll probably make the wrong decision.
Step 1: Get the per-share implied value for each company
For RSUs and PPUs, the current secondary market price is the best signal for what one unit is worth today. For options, the per-share value is the current secondary market price minus your strike price (intrinsic value). Use PrivatePulse's secondary market data for each company to get this number.
Step 2: Calculate the vested value over 4 years
Take the per-share value and multiply by your grant size, applying your vesting schedule. Most grants are 4-year / 1-cliff. Year 1: you vest 25% at the cliff. Years 2-4: you vest 6.25% per quarter. Your vested value grows each quarter — but so does the company (or not), so model multiple scenarios.
Step 3: Apply the likely tax treatment
- RSUs/PPUs: ordinary income tax rate on vested value. You owe tax whether or not you've sold.
- ISOs: exercise may trigger AMT; if you hold 2 years from grant + 1 year from exercise, capital gains applies.
- NSOs: ordinary income tax at exercise on the spread (current price − strike). Deducted by employer.
Step 4: Model dilution
The company that's $5B today may be $25B in 4 years — but to get there, they may raise 3 more rounds and dilute each share by 30%. Model the dilution. If the $5B company is planning a $500M Series C, your shares will be diluted approximately 10% by that round alone.
Step 5: Apply a liquidity probability
Private equity is illiquid. A 10% probability-weighted liquidity discount is reasonable for any company more than 3 years from IPO/acquisition. For companies closer to a liquidity event (Stripe, Databricks IPO imminent), apply a lower discount.
The comparison framework
Annual economic value = (current intrinsic value × vested shares per year × (1 - tax rate) × liquidity probability) / 4. Run this for both offers. The company with the higher number on this adjusted basis is the better equity deal — ignoring all other factors.
Always compare adjusted equity value, not grant-letter value. A $500K RSU at a $100B company with a clear IPO path beats a $700K option grant at a $10B company with no liquidity timeline in 9 out of 10 scenarios.