Stock Options Calculator
Model startup stock option grants, exercise costs, current 409A fair market value spreads, ISO AMT vs. NSO ordinary income tax exposure, and projected liquidity proceeds.
Grant & Valuation ParametersPrivate & Client-Side
Vesting Milestone Progression
| Milestone | Vested Shares | Vested % | Paper Value | Exit Value |
|---|---|---|---|---|
| Year 1 (Cliff) | 6,250 | 25% | $34,375 | $150,000 |
| Year 2 | 12,500 | 50% | $68,750 | $300,000 |
| Year 3 | 18,750 | 75% | $103,125 | $450,000 |
| Year 4 | 25,000 | 100% | $137,500 | $600,000 |
Stock Option Valuation & Tax Mechanics
Exercise Cost & Intrinsic Value
The intrinsic spread represents your on-paper equity wealth at the current 409A fair market valuation.
ISO vs. NSO Tax Distinction
• Incentive Stock Options (ISOs): No ordinary tax upon exercise. The spread (FMV − Strike) is an AMT preference item. If held >2 years from grant and >1 year from exercise, proceeds are taxed at favorable long-term capital gains rates.• Non-Qualified Stock Options (NSOs): The spread (FMV − Strike) is treated as W-2 wage compensation at exercise, subject to immediate income and payroll taxes.
Frequently Asked Questions About Startup Stock Options
What happens if I leave the company before an IPO or acquisition?
Most standard startup option agreements enforce a Post-Termination Exercise Period (PTEP) of 90 days for ISOs. If you do not exercise your vested options within 90 days of leaving, they expire and return to the company option pool. Some forward-thinking startups extend this window to 5-10 years.
What is an 83(b) election and does it apply to options?
An 83(b) election applies to restricted stock or early-exercised options. It allows you to pay taxes on the fair market value at grant/exercise rather than waiting for vesting. It must be filed with the IRS within strictly 30 days of stock receipt. Standard unexercised stock options cannot file an 83(b).
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