Hiring template

Startup Offer Letter Template With Equity

A clean, founder-friendly offer letter you can copy, plus a plain-English guide to the equity section: what to put in the letter, what to keep in a separate grant document, and the vesting and tax details that trip teams up. Built for startups making early hires without a legal team on call.

This template is a starting point, not legal advice. Equity and employment terms carry real legal and tax weight. Have an attorney review your version before you send it, especially the equity language.

What belongs in the letter, and what does not

The most common mistake founders make is writing binding equity terms into the offer letter itself. Keep the offer letter short and warm. Put the legally binding equity details in the stock option grant or restricted stock agreement that the board approves separately.

The offer letter should summarize the equity so the candidate understands the deal: the number of shares or options, the type, the vesting schedule, and a pointer to the formal grant documents. It should make clear that the actual grant is subject to board approval and the plan documents. That one line protects you if the number changes or the board has not yet approved the pool.

The equity terms you should understand first

• **Options vs RSUs.**Early-stage startups almost always grant stock options (usually ISOs for employees), not RSUs. Options give the right to buy shares later at a fixed strike price. RSUs are more common at larger, later-stage companies.
• **Strike price and the 409A.**The strike price is set by an independent 409A valuation. Granting below fair market value creates tax problems, so use a current 409A (refresh it after each priced round or at least annually).
• **Vesting schedule.**The standard is four years with a one-year cliff. Nothing vests in the first year; at the one-year mark, 25% vests at once, then the rest vests monthly over the remaining three years. The cliff protects you from a short-term hire walking away with equity.
• **Number of shares, not just percentage.**State the share count and, ideally, the fully diluted percentage as of the offer date. Percentages drift as you raise, so the share count is the firm number.
• **Acceleration.**Senior hires sometimes negotiate single or double-trigger acceleration on a sale. Decide your policy before you offer, and keep the detail in the grant agreement.

The template

Copy this, replace the bracketed fields, and send it as a PDF on company letterhead. The equity paragraph is written to summarize without over-promising.

[Company Name]

[Company Address]

[Date]

Dear [Candidate Name],

We are excited to offer you the position of [Job Title] at [Company Name]. We think you will do great work here, and we are glad you are considering joining us.

Role. You will report to [Manager Name, Title]. Your start date will be [Start Date], working [full-time / part-time] from [location / remote].

Cash compensation. Your starting salary will be [$Amount] per year, paid [semi-monthly] in line with our standard payroll schedule, less applicable withholdings.

Equity. Subject to approval by our Board of Directors, we will recommend a grant of [Number] stock options, representing approximately [X]% of the company on a fully diluted basis as of the date of this letter. The options will be subject to a four-year vesting schedule with a one-year cliff: 25% vest on your first anniversary, and the remainder vests in equal monthly installments over the following 36 months. The exercise price will be the fair market value on the grant date, as determined by the Board. The grant is governed by the company equity incentive plan and your individual grant agreement, which will control in the event of any conflict with this summary.

Benefits. You will be eligible for [health insurance, [N] days paid time off, and other benefits] on the same terms as our other employees, which we may change from time to time.

At-will employment. Employment with [Company Name] is at will, meaning either you or the company may end the relationship at any time, with or without cause or notice. This letter is not a contract for a fixed term.

Contingencies. This offer is contingent on your eligibility to work in [country] and on signing our standard confidentiality and invention assignment agreement.

To accept, please sign below and return this letter by [Offer Expiration Date]. We are looking forward to working with you.

Warm regards,

[Founder Name]

[Title], [Company Name]

[Candidate Name]

Need a filled-in version in seconds? The offer letter generator builds a clean letter from a short form, and CurriculoATS keeps every offer tied to the candidate it belongs to.

Five mistakes to avoid

• **Promising exact equity before board approval.**Always frame the grant as a recommendation subject to the board. Use "we will recommend," not "you will receive."
• **Quoting a stale strike price.**If your 409A is old, refresh it before granting. A strike price below fair market value can trigger penalties for the employee under Section 409A.
• **Giving a percentage with no share count.**Percentages shrink with every raise. Put the share number in writing so there is no dispute later.
• **Burying vesting in fine print.**Candidates who do not understand vesting feel misled when they leave early. State the four-year, one-year-cliff schedule plainly.
• **Forgetting the IP assignment.**The offer should be contingent on signing your confidentiality and invention assignment agreement. Without it, ownership of work product is murky.

Keep offers and candidates in one place

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Frequently asked questions

Should equity terms go in the offer letter or a separate document?

Summarize the equity in the offer letter so the candidate understands the deal, but keep the binding terms in the board-approved grant agreement and the equity plan. State that the grant is subject to board approval and that the plan documents control. This protects you if the number or timing changes.

What is a standard startup vesting schedule?

Four years with a one-year cliff. Nothing vests for the first year, then 25% vests on the first anniversary, and the remaining 75% vests in equal monthly installments over the next three years. The cliff protects the company from a short-term hire keeping equity.

Should I list a dollar value for the equity?

Be careful. You can state the share count, the option type, the strike price, and the fully diluted percentage on the offer date. Avoid projecting a future dollar value, which can read as a promise. If you model an outcome, label it clearly as an illustration, not a guarantee.

What is a 409A valuation and why does it matter?

A 409A is an independent appraisal of your common stock's fair market value. It sets the strike price for options. Granting below that value can create tax penalties for the employee, so use a current 409A and refresh it after each priced round or at least once a year.

Can I send the offer as an email instead of a letter?

You can, and many startups do, but put it in a clean PDF on letterhead with a signature line. It reads as more serious, it is easier to store with the candidate record, and it reduces confusion about what was actually offered.

Do I need an at-will employment clause?

In the United States, yes, in almost every case. The at-will clause makes clear the letter is not a fixed-term contract. Keep the language plain and consistent across all your offers, and confirm the wording with counsel for your state.