## Overview

Advanced Equity provides annualized benchmarks for ongoing grant values and unvested equity holdings along with deeper insights into equity practices across equity burn rates, vesting structures, vesting schedules, and more.

## Table of contents:

* Compensation Types
* Advanced Equity Filters
* Advanced Equity Practices
* Common Definitions

## Compensation Types

Advanced Equity provides additional granularity into equity compensation types, including New Hire Equity and Total Equity (executives only), along with two additional equity compensation types:

Ongoing Grant Values: Represents the value of the non-new hire grants received by an employee in the past 12 months. Original grant value reflects the original value at the time the grants were received. Actual value is based on the current value of the equity and includes stock appreciation.

Unvested Equity Values: Represents the current value of all the equity holdings received by an employee that have not yet vested. ![](https://brainfish-storage-prod.s3-accelerate.amazonaws.com/uploads/6be5ca97-b345-4813-a9dd-abb6861e85fe/1ba93bd1-bf9f-4943-bfa9-71a7ffbac311/image.png?X-Amz-Algorithm=AWS4-HMAC-SHA256&X-Amz-Credential=ASIAUPPN5IL3UTG456X3%2F20260505%2Fus-east-2%2Fs3%2Faws4_request&X-Amz-Date=20260505T213910Z&X-Amz-Expires=3000&X-Amz-Security-Token=IQoJb3JpZ2luX2VjEMH%2F%2F%2F%2F%2F%2F%2F%2F%2F%2FwEaCXVzLWVhc3QtMiJGMEQCICdf0yGFcGV9Cgp%2FlTte%2FEI3ueqE%2F2ETFz0OYDxTaP%2FhAiADt2EIu8IHKQU4eDzzpXtkFDcbY300UKjywgQ6b812syrlBQiK%2F%2F%2F%2F%2F%2F%2F%2F%2F%2F8BEAIaDDMwODEyNTk3NTI4NyIM%2F9AKpX0d43h9wiEgKrkFsgknz7p%2BvCy2wkYKIUtCSrKjQ1GgRM%2BJS5f%2BQbS7B1FkgqfM6fO0UG12LCQILXxHmkb%2FoWrOZKgq9Ne7p9ZfsrnftsZXck%2F7bV7f0KSq0zWY%2BAzh1Gm4IynZk%2BYmmnTzy2Y5BC7mXGYAHz5AEuVy43oo0SCa9Ewc2hHIl8iwOXRbnAdMbjWatnnSpQyLbvVGwCr0L3KLDmQuk7hzHegBaw4WONlcyZ%2BxBafoF6xzHyJUcKcMYIfR%2FooZcQXgfIbfclHsjrl0bol5aiKkiwupZjAe6KS6vEZnYeToSeaAbABMBhArN8cXcBsURZ%2FHaZ3D2joVHReKU37LGcgDJnZB3euqbDVTdlKeXV%2BgLlOmiiS4LFcUn%2B7vvCfPhBKyQqso2l94SKk2L%2BQtp8MxMNyqvyUTYfLvZzDO3%2BpiPSdQhBrPsIvB%2F3xUstVpZBxsT9ZMNTmkmwvRtdtIcf8B6BE9cs8gAiVdq99nMoLglDFgi0h%2FSpfaYqUerFrXOZw10zC0c3t7PlzVur7yBZSJX%2F9o62smYwC5PQw2UNwyYumrHmVn%2BvHmiuy3jfMW4gMRfFaCoZAJaYMEVvsIP5f38XoYWC5WR8%2FYL7E2V7B0oS%2BdrIGtsAhKL7hJttK5NIhdHDT0tHY28WIA6DwryZ6CZ8tWZ0KfREsd5uem7k6iDjrjYORj92%2ByzTkiN9ubkV1bbbnBnnDEilZiO7Plwfssuvig%2B90K4WAx5EZmpWZ%2BLqkXGpq0spxlSSdJ6RvY0%2F0OMCz43ZZ34b4xm4Q6Cv6u%2F%2BDrCrn1Zc4jhg4irxCPkRwzebcsBci0VVaMpAoK%2BJrcJ9bzqDG%2BLDTGkmhPwq7Ib9mcwOreMz6KaCKK93JDKHYMA0fGHIqa%2FRHq4WarYc%2F4zani8DQq4a1eMfGxR9zXV3iOP6Aav%2B5aTjBBIzCqt%2BjPBjqRAW3tIwBrTjL6XbM7KnP4sI%2FlgQv2UZko3jL1jFgqo9QIU2TILsZtX5m%2B%2BK40KaaoQKgyLj4N2I5DucS0Ms%2FwwvkBJ2ned5wzhnASeNO1%2BdTS88vK23mzksWD9%2BtEU3iqpL4JiTwMsFh%2F5HxP61a5SBaRsHocCeqKnrAiqUbZfk%2FCp7pNpujGIqEG8tWmusK4bYA%3D&X-Amz-Signature=fcbf1a69f82af722f8c9d89722b44895077c3881a571baa4b58efb0d3b44a730&X-Amz-SignedHeaders=host&response-content-disposition=attachment)

## Advanced Equity Filters

In addition to the additional equity compensation types, Advanced Equity also provides flexibility into how the benchmarks are calculated and normalized across different equity practices. These filters include:

### Equity Views

* **Gross**: The number of shares granted multiplied by the share price.
* **Net**: The number of shares granted multiplied by the difference between the share price and the exercise price.
* **409a**: The number of shares granted multiplied by the most recent 409a price.
* **Equity Ownership (%)**: The number of shares granted divided by fully diluted shares.

### Equity Timeframe

* **Total**: Refers to the total value of the equity over the full vesting period, including all vesting durations.
* **Annualized**: Displays annualized values for new hire and ongoing equity based on grant-level vesting durations. Unvested equity displays the value vesting over the next 12 months.

Grant Value

* **Original value**: Calculated using the share price, 409a price, or fully diluted shares at the time the equity was granted.
* **Current value**: Calculated using the most recent share price, 409a price, or fully diluted shares and includes stock appreciation. ![](https://brainfish-storage-prod.s3-accelerate.amazonaws.com/uploads/6be5ca97-b345-4813-a9dd-abb6861e85fe/b17f6ee1-4478-44b7-a925-d7423f383c74/image.png?X-Amz-Algorithm=AWS4-HMAC-SHA256&X-Amz-Credential=ASIAUPPN5IL3UTG456X3%2F20260505%2Fus-east-2%2Fs3%2Faws4_request&X-Amz-Date=20260505T213910Z&X-Amz-Expires=3000&X-Amz-Security-Token=IQoJb3JpZ2luX2VjEMH%2F%2F%2F%2F%2F%2F%2F%2F%2F%2FwEaCXVzLWVhc3QtMiJGMEQCICdf0yGFcGV9Cgp%2FlTte%2FEI3ueqE%2F2ETFz0OYDxTaP%2FhAiADt2EIu8IHKQU4eDzzpXtkFDcbY300UKjywgQ6b812syrlBQiK%2F%2F%2F%2F%2F%2F%2F%2F%2F%2F8BEAIaDDMwODEyNTk3NTI4NyIM%2F9AKpX0d43h9wiEgKrkFsgknz7p%2BvCy2wkYKIUtCSrKjQ1GgRM%2BJS5f%2BQbS7B1FkgqfM6fO0UG12LCQILXxHmkb%2FoWrOZKgq9Ne7p9ZfsrnftsZXck%2F7bV7f0KSq0zWY%2BAzh1Gm4IynZk%2BYmmnTzy2Y5BC7mXGYAHz5AEuVy43oo0SCa9Ewc2hHIl8iwOXRbnAdMbjWatnnSpQyLbvVGwCr0L3KLDmQuk7hzHegBaw4WONlcyZ%2BxBafoF6xzHyJUcKcMYIfR%2FooZcQXgfIbfclHsjrl0bol5aiKkiwupZjAe6KS6vEZnYeToSeaAbABMBhArN8cXcBsURZ%2FHaZ3D2joVHReKU37LGcgDJnZB3euqbDVTdlKeXV%2BgLlOmiiS4LFcUn%2B7vvCfPhBKyQqso2l94SKk2L%2BQtp8MxMNyqvyUTYfLvZzDO3%2BpiPSdQhBrPsIvB%2F3xUstVpZBxsT9ZMNTmkmwvRtdtIcf8B6BE9cs8gAiVdq99nMoLglDFgi0h%2FSpfaYqUerFrXOZw10zC0c3t7PlzVur7yBZSJX%2F9o62smYwC5PQw2UNwyYumrHmVn%2BvHmiuy3jfMW4gMRfFaCoZAJaYMEVvsIP5f38XoYWC5WR8%2FYL7E2V7B0oS%2BdrIGtsAhKL7hJttK5NIhdHDT0tHY28WIA6DwryZ6CZ8tWZ0KfREsd5uem7k6iDjrjYORj92%2ByzTkiN9ubkV1bbbnBnnDEilZiO7Plwfssuvig%2B90K4WAx5EZmpWZ%2BLqkXGpq0spxlSSdJ6RvY0%2F0OMCz43ZZ34b4xm4Q6Cv6u%2F%2BDrCrn1Zc4jhg4irxCPkRwzebcsBci0VVaMpAoK%2BJrcJ9bzqDG%2BLDTGkmhPwq7Ib9mcwOreMz6KaCKK93JDKHYMA0fGHIqa%2FRHq4WarYc%2F4zani8DQq4a1eMfGxR9zXV3iOP6Aav%2B5aTjBBIzCqt%2BjPBjqRAW3tIwBrTjL6XbM7KnP4sI%2FlgQv2UZko3jL1jFgqo9QIU2TILsZtX5m%2B%2BK40KaaoQKgyLj4N2I5DucS0Ms%2FwwvkBJ2ned5wzhnASeNO1%2BdTS88vK23mzksWD9%2BtEU3iqpL4JiTwMsFh%2F5HxP61a5SBaRsHocCeqKnrAiqUbZfk%2FCp7pNpujGIqEG8tWmusK4bYA%3D&X-Amz-Signature=d7c093690e8f8e5bfc8a3c9762475628a52b5a949e6e80ecfdb9a00d592693f3&X-Amz-SignedHeaders=host&response-content-disposition=attachment)

## Equity Practices Insights

Advanced Equity also provides benchmarks for company-level equity program design practices. Insights include:

* **Equity Burn Rates**: Annual equity burn is calculated by summing the number of shares granted over a 12 month period, divided by fully diluted shares. For private companies, the denominator is the most recent fully diluted shares value within the 12 month period. For public companies, the denominator is the weighted average outstanding shares over the 12 month period.
* **Vesting Duration**: The length of time over which an equity grant vests. 
* **Vesting Interval**: The frequency at which equity vests after the grant’s cliff (if applicable) has been reached.
* **Vesting Structure**: The rate at which a grant’s equity vests over time.
* **Cliff Duration**: A period of time during which no portion of the grant vests. At the end of this period, a lump sum or percentage of the grant becomes fully vested, allowing the recipient to exercise ownership rights. ![](https://brainfish-storage-prod.s3-accelerate.amazonaws.com/uploads/6be5ca97-b345-4813-a9dd-abb6861e85fe/86e372c3-9007-4e0a-bd14-2d9d728dd13a/image.png?X-Amz-Algorithm=AWS4-HMAC-SHA256&X-Amz-Credential=ASIAUPPN5IL3UTG456X3%2F20260505%2Fus-east-2%2Fs3%2Faws4_request&X-Amz-Date=20260505T213910Z&X-Amz-Expires=3000&X-Amz-Security-Token=IQoJb3JpZ2luX2VjEMH%2F%2F%2F%2F%2F%2F%2F%2F%2F%2FwEaCXVzLWVhc3QtMiJGMEQCICdf0yGFcGV9Cgp%2FlTte%2FEI3ueqE%2F2ETFz0OYDxTaP%2FhAiADt2EIu8IHKQU4eDzzpXtkFDcbY300UKjywgQ6b812syrlBQiK%2F%2F%2F%2F%2F%2F%2F%2F%2F%2F8BEAIaDDMwODEyNTk3NTI4NyIM%2F9AKpX0d43h9wiEgKrkFsgknz7p%2BvCy2wkYKIUtCSrKjQ1GgRM%2BJS5f%2BQbS7B1FkgqfM6fO0UG12LCQILXxHmkb%2FoWrOZKgq9Ne7p9ZfsrnftsZXck%2F7bV7f0KSq0zWY%2BAzh1Gm4IynZk%2BYmmnTzy2Y5BC7mXGYAHz5AEuVy43oo0SCa9Ewc2hHIl8iwOXRbnAdMbjWatnnSpQyLbvVGwCr0L3KLDmQuk7hzHegBaw4WONlcyZ%2BxBafoF6xzHyJUcKcMYIfR%2FooZcQXgfIbfclHsjrl0bol5aiKkiwupZjAe6KS6vEZnYeToSeaAbABMBhArN8cXcBsURZ%2FHaZ3D2joVHReKU37LGcgDJnZB3euqbDVTdlKeXV%2BgLlOmiiS4LFcUn%2B7vvCfPhBKyQqso2l94SKk2L%2BQtp8MxMNyqvyUTYfLvZzDO3%2BpiPSdQhBrPsIvB%2F3xUstVpZBxsT9ZMNTmkmwvRtdtIcf8B6BE9cs8gAiVdq99nMoLglDFgi0h%2FSpfaYqUerFrXOZw10zC0c3t7PlzVur7yBZSJX%2F9o62smYwC5PQw2UNwyYumrHmVn%2BvHmiuy3jfMW4gMRfFaCoZAJaYMEVvsIP5f38XoYWC5WR8%2FYL7E2V7B0oS%2BdrIGtsAhKL7hJttK5NIhdHDT0tHY28WIA6DwryZ6CZ8tWZ0KfREsd5uem7k6iDjrjYORj92%2ByzTkiN9ubkV1bbbnBnnDEilZiO7Plwfssuvig%2B90K4WAx5EZmpWZ%2BLqkXGpq0spxlSSdJ6RvY0%2F0OMCz43ZZ34b4xm4Q6Cv6u%2F%2BDrCrn1Zc4jhg4irxCPkRwzebcsBci0VVaMpAoK%2BJrcJ9bzqDG%2BLDTGkmhPwq7Ib9mcwOreMz6KaCKK93JDKHYMA0fGHIqa%2FRHq4WarYc%2F4zani8DQq4a1eMfGxR9zXV3iOP6Aav%2B5aTjBBIzCqt%2BjPBjqRAW3tIwBrTjL6XbM7KnP4sI%2FlgQv2UZko3jL1jFgqo9QIU2TILsZtX5m%2B%2BK40KaaoQKgyLj4N2I5DucS0Ms%2FwwvkBJ2ned5wzhnASeNO1%2BdTS88vK23mzksWD9%2BtEU3iqpL4JiTwMsFh%2F5HxP61a5SBaRsHocCeqKnrAiqUbZfk%2FCp7pNpujGIqEG8tWmusK4bYA%3D&X-Amz-Signature=534cf77f4a6b63293264323e3b51bea79579da97cc1d807d7b0bf2fdb318044b&X-Amz-SignedHeaders=host&response-content-disposition=attachment)

## Common Definitions

**Fully Common Shares Outstanding** - Common stock for a company that has been authorized or issued.

**Fully Diluted Shares** - Outstanding Shares + convertible securities, such as bonds, which can be converted to company common stock.

**Black-Scholes Value** - A calculation to determine option value, used by Carta and Radford. Large calculation that takes into account stock volatility, expected time to exit, company value, exercise price, and risk-free rate.

**409A Valuation** - Independent appraisal of the fair market value (FMV) of a company’s common stock.

**Common Stock** - Stock sold to be sold at a company’s fair market value.

**Preferred Stock** - Generally issued to early stage investors, and has priority for being able to be sold during a liquidity or bankruptcy event.

**Preferred Price** - What investors paid for the stock in the latest funding round.

**Exercise Price** - The price at which an option may be purchased for. (Also known as strike price, or 409a price, or FMV (fair market value) price).

**New Hire Grant Equity** - The first equity assigned to an employee, based on the vesting start date. If multiple grants are given on the same start-day, they are combined. Note that eventually we may wish to add a requirement that to be a new hire grant, it must start vesting within a certain number of months of start date (but today we do not have this control in place).

**Refresh Grant Equity** - All equity that is not granted as part of an employee’s new hire equity.

**Annualized Grant Value** - The value of a grant per year that it is granted over. For example, if a 100k grant vests over 4 years, the annualized grant value is 25k.

**Intended Grant Value** - The value of the grant based on the latest round of funding since when the grant was granted. For example, if a grant was granted in 2019 and the last funding round was in 2018, it is based on that share price. If there is a new valuation for the company in 2020, the intended value does not change.

**Actual Grant Value** - The value of the grant based on the latest funding round relative to today. For example, if a grant was granted in 2019 and the last funding round is in 2018, the grant would have originally been based on the 2018 valuation. However, upon a new valuation in 2020, the actual value of the grant changes to reflect the latest funding round.

**Vesting Interval** - The frequency at which equity vests. This will occur after a vesting cliff has been reached in a grant, assuming a cliff is included in the grant.

**Vesting Cliff** - A date after a period of time from when the grant was signed that an employee receives the right to start receiving equity.

**Vesting Structure** - The rate at which a grant’s equity vests over time. A back-weighted grant vests more equity toward the end of the grant schedule, where as an accelerated grant vests more equity in the beginning of a grant schedule, and a linear grant vests consistently throughout the grant at an equal rate.

**Vesting Duration** - The length of time (generally in years) over which a grant vests over. Grants vesting over more than 20 years or less than 0 years are ruled out from vesting duration calculations in Advanced Equity.

**Vesting Start Date** - The date that a grant starts to vest. Note that this is different than a cliff achieved date. Any vesting start date > 2100 is ruled out of calculations in Advanced Equity.

**Cliff Achieved Date** - The date at which a cliff of a grant that is vesting has been reached. For example, if a grant’s vesting start date is on 1/1/2020 with a 1 year cliff, the vesting cliff date is 1/1/2021.

**Equity Burn** - The total shares issued under a company's equity compensation plan in a fiscal year divided by the company's total common shares outstanding.

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