How do stock options work?

A stock option gives someone the right to buy shares in your company at a fixed price (called the strike price) once they've vested. It's a promise of future ownership, not shares themselves. Once someone's options vest, they can choose to exercise them (buy the shares) at the price you set when you granted the option.

What's the difference between an ISO and an NSO?

ISOs (Incentive Stock Options) are for US employees. They come with a tax advantage: if you hold the shares long enough, gains can qualify for lower long-term capital gains tax instead of ordinary income tax. There are some limits on how much you can give any one person in a year. NSOs (Non-qualified Stock Options) are for everyone else (consultants, advisors, and non-US team members ) since ISOs are only available to US employees by law. NSOs don't get the same tax break, but they're more flexible on who can receive them.

How much equity should I give someone?

There's no universal formula. It depends on your stage, the role, how early they're joining, and what similar companies are offering. It's one of the hardest calls founders make, and getting it wrong in either direction has real costs. Our team can talk you through how other companies at your stage are approaching it.

What's a vesting schedule, and what's a cliff?

Vesting is the timeline over which someone earns their options—commonly 4 years. A cliff is a minimum period (usually 1 year) someone has to stay before any of their options vest at all. So if someone leaves after 6 months, they typically walk away with nothing; after the cliff, they start vesting a portion with each month or year that passes.

Why are option grants often issued in batches?

Option grants need to be approved by your board through a single board consent, and every detail (amount, strike price, vesting) has to be locked in before that happens. Because of this, most companies batch grants together (for example, after a round of hiring) rather than issuing one at a time.

What's a 409A valuation, and why do I need one?

A 409A valuation sets the fair market value of your company's shares, which is used to set a defensible strike price for your option grants. Without one, you're exposed if the IRS later decides your strike price was set too low. We bundle this in as part of your options subscription, so you're not sourcing it separately.

Do I need a new 409A valuation if I raise a funding round?

Usually, yes. A funding round changes your company's valuation, which means your existing 409A no longer reflects a fair strike price. If you want to grant more options after raising, you'll typically need an updated valuation first. We can get you a discounted price on your next 409A valuation via our trusted partner.

Does SeedLegals handle the money when someone exercises their options?

No, we handle the paperwork and keep your cap table accurate, but the option holder pays their exercise price directly to your company. We're not set up to hold or move funds on your behalf.

Do I need an Equity Incentive Plan before I can grant options?

Yes. Your EIP sets the total number of options you're allowed to grant and the rules that govern them. Once it's in place, every grant you make just needs to fit within it.

Can I bring an equity plan I already set up elsewhere onto SeedLegals?

Yes. If you've already got an EIP or existing grants set up through a lawyer or another platform, we can bring those across so everything's tracked accurately going forward.

What happens when someone exercises their options?

Once an option is vested, the holder can choose to exercise it, meaning they pay the strike price to actually buy the shares. When that happens, it's reflected straight into your cap table, so your ownership records stay accurate automatically.

Set up an Equity Incentive Plan

Your team can be as invested
as you are

Give them real ownership in what you’re building. Set up your equity incentive plan, get your 409A valuation, grant ISO and NSO options, track vesting and exercise the options – all on SeedLegals.

Start free

Talk to the team

Use equity to attract and keep the best people

Keep your best people invested

Equity plans let you make a competitive offer even when cash is tight. Vesting schedules mean your team stays committed for the long haul.

Grant to anyone on your team

Support for both ISOs and NSOs means you can grant to employees, advisors, and contractors, all from the same plan.

Skip the extra vendor

Your 409A valuation is bundled right into your subscription, giving you one less thing to worry about.

Have it all in one place

Grant, track and exercise seamlessly. Plus, our experienced team is always here to help whenever you need it.

What are stock options?

Give your team a stake in the outcome

Stock options give the people who help you build your company a chance to own a piece of it. You grant the option, they earn it over time, and if the company does well, so do they.

Attract and retain top talent you can’t afford to lose
Keep your best people invested for the long haul
Grant, vest, and exercise all in one place

ISOs and NSOs

One platform, every kind of option grant

Whether you're granting to employees, bringing on an advisor, or hiring a contractor, we support both ISO and NSO stock options.

Grant ISOs (for US employees) and NSOs (for consultants, advisors, non-US team) from the same Equity Incentive Plan
Each grant is documented correctly for its type, automatically
No guesswork about which option type fits who you're hiring

Here's how it works

Set up your plan

Log in to SeedLegals and hit ‘start’ on your Equity Incentive Plan (EIP) workflow. It sets the rules for every option you grant from here on, and reserves the shares for your future option grants.
Get your 409A valuation

We bundle in a fair market valuation via our trusted 409A valuation partner, so your grants get a defensible strike price without having to find one separately.
Create your grants

Choose ISO or NSO for each option holder, then create your grants as a batch. We'll handle the board consent and generate all your individual grant documents.
Track everything easily

As your team vests and exercises their options, it's all reflected in your option holder table automatically, and as options are exercised and become shares, your cap table is automatically updated too.

FAQs

Frequently asked questions about Equity Incentive Plans

How do stock options work?

A stock option gives someone the right to buy shares in your company at a fixed price (called the strike price) once they've vested. It's a promise of future ownership, not shares themselves. Once someone's options vest, they can choose to exercise them (buy the shares) at the price you set when you granted the option.
What's the difference between an ISO and an NSO?

ISOs (Incentive Stock Options) are for US employees. They come with a tax advantage: if you hold the shares long enough, gains can qualify for lower long-term capital gains tax instead of ordinary income tax. There are some limits on how much you can give any one person in a year.

NSOs (Non-qualified Stock Options) are for everyone else (consultants, advisors, and non-US team members ) since ISOs are only available to US employees by law. NSOs don't get the same tax break, but they're more flexible on who can receive them.
How much equity should I give someone?

There's no universal formula. It depends on your stage, the role, how early they're joining, and what similar companies are offering. It's one of the hardest calls founders make, and getting it wrong in either direction has real costs. Our team can talk you through how other companies at your stage are approaching it.
What's a vesting schedule, and what's a cliff?

Vesting is the timeline over which someone earns their options—commonly 4 years. A cliff is a minimum period (usually 1 year) someone has to stay before any of their options vest at all. So if someone leaves after 6 months, they typically walk away with nothing; after the cliff, they start vesting a portion with each month or year that passes.
Why are option grants often issued in batches?

Option grants need to be approved by your board through a single board consent, and every detail (amount, strike price, vesting) has to be locked in before that happens. Because of this, most companies batch grants together (for example, after a round of hiring) rather than issuing one at a time.
What's a 409A valuation, and why do I need one?

A 409A valuation sets the fair market value of your company's shares, which is used to set a defensible strike price for your option grants. Without one, you're exposed if the IRS later decides your strike price was set too low. We bundle this in as part of your options subscription, so you're not sourcing it separately.
Do I need a new 409A valuation if I raise a funding round?

Usually, yes. A funding round changes your company's valuation, which means your existing 409A no longer reflects a fair strike price. If you want to grant more options after raising, you'll typically need an updated valuation first. We can get you a discounted price on your next 409A valuation via our trusted partner.
Does SeedLegals handle the money when someone exercises their options?

No, we handle the paperwork and keep your cap table accurate, but the option holder pays their exercise price directly to your company. We're not set up to hold or move funds on your behalf.
Do I need an Equity Incentive Plan before I can grant options?

Yes. Your EIP sets the total number of options you're allowed to grant and the rules that govern them. Once it's in place, every grant you make just needs to fit within it.
Can I bring an equity plan I already set up elsewhere onto SeedLegals?

Yes. If you've already got an EIP or existing grants set up through a lawyer or another platform, we can bring those across so everything's tracked accurately going forward.
What happens when someone exercises their options?

Once an option is vested, the holder can choose to exercise it, meaning they pay the strike price to actually buy the shares. When that happens, it's reflected straight into your cap table, so your ownership records stay accurate automatically.

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