Fundraising
Stock option
A stock option is a right to buy company shares at a fixed exercise price, typically granted to employees and vesting over time. Options are issued by corporations rather than LLCs, which is one reason companies convert to a C-Corporation before building a team.
In plain terms: The right to buy shares later at today's price.
Why it matters
A standard part of hiring in venture-backed companies, and awkward to replicate in an LLC. If equity compensation is part of the plan, that is a reason to consider corporate structure earlier.
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