What Should Entrepreneurs Consider When Issuing Stock Options?
Entrepreneurs need to carefully consider several factors before issuing stock options:
Company Valuation: It's important to determine the fair market value of the company's shares to set an appropriate exercise price. Vesting Schedule: A standard vesting schedule helps ensure that employees remain with the company for a significant period. Dilution: Issuing too many stock options can dilute existing shareholders' equity, so balance is key. Legal Compliance: Ensure that the stock option plan complies with all relevant securities laws and regulations.