Stock Options 

Stock Options give employees, advisors, or investors the right to purchase a set number of company shares at a predetermined price (exercise price) within a specific timeframe. It’s a popular form of equity-based compensation in startups, aligning employee interests with long-term company performance. 

Key elements: 

• Vesting schedule: Period over which stock options become exercisable 

• Exercise price: Fixed price at which shares can be purchased 

• Expiration date: Date by which options must be exercised 

Types: 

• Incentive Stock Options (ISOs) 

• Non-qualified Stock Options (NSOs)