ESOP Calculator
Estimate the value of employee stock options based on strike price, vesting schedule, and projected company valuation.
Option Value
Current Value
$45,000
paper value today
At Exit
$245,000
projected value
Exercise Cost
$5,000
to buy all options
Ownership
0.500%
of the company
Vesting Milestones
At cliff
12,500 options
month 12
Year 2
25,000 options
month 24
Year 3
37,500 options
month 36
Fully vested
50,000 options
month 48
What is this?
Employee Stock Option Plans (ESOPs) give employees the right to purchase company shares at a predetermined price (strike price) after a vesting period. The value of stock options depends on the difference between the current or future share price and the strike price, multiplied by the number of vested options. Most startups use a 4-year vesting schedule with a 1-year cliff, meaning no options vest until the first anniversary.
Why it matters
Stock options are a critical part of startup compensation, especially for early employees who accept below-market salaries. Understanding the potential value of your options helps you evaluate job offers, negotiate equity packages, and make informed decisions about exercising. For founders, modeling ESOP grants helps you plan your option pool and understand the true cost of equity compensation.
How to use this calculator
Enter the number of options granted, the strike price (also called exercise price), the current company valuation, total outstanding shares, and your vesting terms. Then enter a projected exit valuation to see what your options could be worth. The calculator shows your current paper value, projected exit value, exercise cost, and vesting milestones.
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