Why Your Stock Options Matter If You're Leaving 
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You’ve dedicated years to helping your company grow. You’ve worked hard, spent long hours building something meaningful, and earned stock options along the way. But now, as you prepare to leave, there’s one crucial question to consider: What happens to your stock options when you leave? 

Unfortunately, many employees overlook this detail, only to lose their equity because of short timelines and financial barriers. We’re here to help you avoid that fate and guide you toward preserving what you’ve earned. 

This guide will explain why timing matters, what it really means to “exercise” your stock options, and what you can do when the cost feels overwhelming. 

The 90-Day Dilemma: Why Timing Matters 

For most U.S. startup employees with unexercised vested stock options, there’s a standard “post-termination exercise window” of 90 days. This means you have just three months after resigning to decide whether to purchase your vested stock options and convert them into actual shares. 

If this window expires and you haven’t exercised your options, they're gone ,for good.

Here’s why this catches so many people off guard:

• Lack of Awareness: Many employees aren’t fully informed about the expiration date of their options.
• Financial Pressure: Exercising stock options can be expensive, making it a difficult choice if you’re unprepared. 

How to prepare: 

Before you give notice, review your stock option agreement, confirm your post-termination exercise timeline, and calculate exactly how much exercising will cost. 

What Does It Mean to “Exercise” My Options?

Exercising your stock options means you’re purchasing shares by paying the strike price (the set price for your options). Depending on the type of options you have, you may also need to pay taxes at this stage. 

It’s important to distinguish between vested options and owned shares:

• Vested options are those you’re authorized to purchase.
• Owned shares are those you’ve already paid for and converted stock options into actual company stock. 

When you leave a company, only your vested options give you the right to exercise. Any unvested options are forfeited. 

Why this matters:

Once you leave, your window to convert vested options into owned shares begins to close. That’s why understanding the financial and tax implications is critical before making your decision. 

But What If I Can’t Afford to Exercise?

Here’s where the challenge begins. Exercising stock options isn’t just about writing a check for the strike price. You’ll also need to account for taxes, especially if your options qualify for incentive stock option (ISO) treatment and trigger Alternative Minimum Tax (AMT). 

According to Equitybee’s data, the average combined cost to exercise and pay taxes in the U.S. is $140,000. 

The total cost depends on several factors, including:

1. Number of Options - More options mean higher costs.
2. Strike Price - The lower your strike price, the lower your cost.
3. 409A Valuation - A higher valuation increases potential tax liabilities.
4. Tax Factors - The type of stock option (ISO or NSO) affects how taxes are calculated. 

The unfortunate truth: 55% of startup employees walk away from their equity because the cost of exercising their options is simply out of reach or the risk is too high. (source: carta)

There’s a Way: Equitybee

This is where Equitybee comes in. We help startup employees fund the cost of exercising their stock options so they can preserve their equity without financial stress. 

What Equitybee offers:

• Tailored Funding Strategy
  Work directly with our equity experts to structure a solution that fits your timeline, tax exposure, and financial goals.
  
  
• Zero Out-of-Pocket Costs
  Become a shareholder without spending personal cash, Investors cover your exercise and tax expenses upfront.
  
  
• You Keep Full Ownership
  Retain full rights to your shares and benefit from your company’s future growth.
• No Exit, No Repayment
  If your company never exits, you owe nothing, repayment only occurs if there’s a liquidity event.
  
  

Equitybee Insights:

• Regulatory Supervision
  Equitybee Securities, LLC is an SEC-registered broker-dealer and FINRA member, requiring compliance, privacy, and security.
• 2,500+ startup employees funded
  Thousands have already used Equitybee to turn their options into ownership, without financial risk to exercise their options.
• Backed by real experience
  We’ve supported employees from 800+ top companies, including Reddit, Discord, Stripe, SpaceX, and Databricks.
• $120M+ in funding facilitated
  Our platform has delivered over $120 million in stock option funding, and counting.

With Equitybee, you don’t have to choose between preserving your equity and protecting your finances. 

Apply now to explore how our process works. 

Real-Life Example: Turning Options Into Ownership at Reddit

When a former Reddit employee left the company, they had 90 days to decide whether to exercise their stock options or let them expire forever.

Reddit was, and still is, a great company. But exercising wasn’t cheap. To become a shareholder, this employee needed around $48,000 to cover the exercise cost.

They didn’t want to lose their equity. But they also weren’t ready to risk that much personal capital.

So they applied for funding through Equitybee.

Once approved, investors on the platform covered the full cost of exercising and taxes. In return, the employee agreed to the following terms, but only if Reddit had an exit:

• Repay the original funding amount
• Share 25% of the share value
• Pay a 3% interest rate
  
  

Shortly after approval, the employee exercised their options, and officially became a shareholder in Reddit.

The Outcome: Reddit Goes Public

Roughly two years later, Reddit IPO’d. After the lock-up period ended, the employee was able to sell their shares , now valued at nearly $200,000.

After settling the investor’s share and Equitybee’s platform fee, the employee walked away with a net gain of just under $100,000, without ever risking their own savings.

[Read the full article] 

Final Checklist: Before You Resign 

Here’s how to protect your equity as you prepare to leave your job:

1. Review your option grant. Check the number of vested options, your strike price, and your expiration window. 
2. Understand your costs. Calculate the total exercise and tax cost, factoring in potential AMT. 
3. Explore your funding options. If the cost feels out of reach, or the risk too high, consider platforms like Equitybee to fund your exercise. 
4. Make a plan. Don’t leave your options until the last minute. 

Remember:

You’ve worked hard for this equity. Don’t leave money on the table when you walk away. 

Take Control of Your Equity Today 

Equitybee empowers startup employees to become shareholders without risking their financial security. You’ve earned these options. Now, make the most of them. 

Get started with Equitybee and preserve what’s rightfully yours. 

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