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Employee Equity Calculator

Value an employee equity grant at the current valuation and across a vesting schedule.

About Employee Equity Calculator

A grant is only meaningful relative to the fully diluted share count — a number of shares with no denominator says nothing. For options, the value that matters is the spread between the current share price and the strike price. Employees are routinely quoted a share count without a denominator, which makes it impossible to tell whether a grant is worth 0.01% or 1% of the company.

Formula

Employee Equity

Grant value = shares granted × (valuation ÷ fully diluted shares); net gain = shares × (price − strike)

strike price
Price at which options can be exercised
fully diluted shares
All shares plus the whole option pool

Worked example

With the default values below, Employee Equity Calculator returns Value of the Grant Today of $100,000.00. Change any input above and every figure here is recalculated in your browser.

Inputs used

Shares grantedminimum 0
20,000
Total shares outstanding, fully dilutedminimum 1
12,000,000
Company valuationminimum 0
60,000,000
Vesting periodaccepts 1–10 years
4 years
Strike price per shareminimum 0
1

Results

Value of the Grant Today
$100,000.00
Ownership Represented
0.1667%
Value Vesting per Year
$25,000.00
Current Share Price
$5.0000
Net Gain if Exercised Today
$80,000.00

Step by step

  1. 1Values used
  2. 2Employee Equity
  3. 3Value of the Grant Today= 100,000.00
  4. 4Ownership Represented= 0.1667
  5. 5Value Vesting per Year= 25,000.00
  6. 6Current Share Price= 5.0000
  7. 7Net Gain if Exercised Today= 80,000.00

Assumptions and limits

  • The result is derived only from the 5 inputs listed above. Anything not among them is not part of the calculation.
  • In particular, this calculator does not take inflation, tax or fees or charges into account.
  • Figures are rounded for display to 4 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
  • This is an estimate for general information and not professional financial, tax or legal advice. See the full disclaimer for the limits that apply to this kind of calculator.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Frequently Asked Questions

How is Employee Equity calculated?

Grant value = shares granted × (valuation ÷ fully diluted shares); net gain = shares × (price − strike) A grant is only meaningful relative to the fully diluted share count — a number of shares with no denominator says nothing. For options, the value that matters is the spread between the current share price and the strike price.

Why does Employee Equity matter?

Employees are routinely quoted a share count without a denominator, which makes it impossible to tell whether a grant is worth 0.01% or 1% of the company.

What values do I need to enter?

This calculator takes 5 inputs: Shares granted, Total shares outstanding, fully diluted, Company valuation, Vesting period, Strike price per share. The pre-filled defaults are a realistic starting point — replace them with figures from your own environment for a result you can act on.

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