ESO's Monthly Start-up

June 2025

Survey says…

In May, we ran a survey of folks in the ESO Fund ecosystem (maybe even some of you reading this took part). The goal was to get a pulse on how people actually feel about their equity.

Couple pieces of context about the sample group:

  • Everyone in the sample has interacted with ESO Fund in some way. That likely means they have a slightly higher understanding or appreciation of equity than the general population.

  • 94% are Gen X or Millennial, which makes sense given that's the bulk of the startup tech workforce.

  • 51% are based on the West Coast, home to many of the most active startup hubs, so likely a more equity-savvy group overall.

  • In terms of roles, 37% are engineers, 19% are in the C-suite, and the rest span sales, finance, HR, and other functions.

Let’s dive into what we learned.

45% negotiated their equity.

Everyone knows it's smart to negotiate your salary, but equity and other benefits often take a back seat at the negotiation table. Seeing nearly half of people push on equity was an encouraging sign. When done right, it can be a real difference-maker at a startup, as theoretically one of the main draws of joining an early-stage company rather than a large public company like Google or Microsoft is the potential for equity appreciation.

When we broke it down further, we saw a big gap by role. 71% of execs said they negotiated their equity package, compared to just 32% of engineers. Sure, execs usually have more leverage, but if they’re doing it at that rate, others should feel empowered to as well. The tricky part is knowing how to assess your offer and make a case (more on that later).

6.1out of 10.

When asked “How valuable did you consider your equity when you joined the company? (0 = Not valuable at all, 10 = A major reason I accepted the offer)”, this was the average response.

We were hoping for a slightly higher number, but salary, job title, work life balance, etc all have their part when taking a new job.

19% said they were not educated at all when they received their equity.

Despite this, 66% said their company did not offer any educational resources.

And only 11% said they were still not confident in navigating their options.

Despite the lack of company guidance, most people still felt at least somewhat confident. And in the end, 67% of respondents said they’ve either exercised or plan to. That’s higher than industry averages and speaks to the kind of folks in our ecosystem: more engaged, more proactive, and more likely to take action.

Why this matters: While companies aren’t doing enough to educate employees about equity, most people in our ecosystem still feel confident making decisions. That’s encouraging. But the biggest barrier to exercising options, according to our survey, is still the fear of getting it wrong and losing money.

This ties directly into ESO Fund’s mission:

  1. To help employees fund their option exercises without taking on personal risk, and

  2. To raise the overall baseline of equity education through tools like this newsletter and our blog posts.

At the end of the day, we want employees to feel confident and informed: whether they choose to exercise on their own, work with us, or decide not to exercise at all.

For the full survey blog post, check out this link: Mind the Gap: Equity Education in Tech Startups

Tips of the trade

A section where we provide helpful tips for anyone with stock options or shares at private companies.

How to value an equity offer?

So you crush the interviews at a hot new startup, and get offered a job. Most people have a good understanding of what salary they want or expect, and how to negotiate if necessary.

However, according to our survey data less than 40% of respondents negotiated their equity packages when hired. For context, after some digging we found that 73% of employers would negotiate salary, but only 45% of workers actually do. So technically, this hesitancy exists for payroll as well, but nevertheless it seems equity is being negotiated at a lower rate.

So how do you assess an equity offer?

There are really 2 ways to do it:

  1. Dollar amount

  2. Percentage ownership

We are personally partial to the dollar amount version because you can always compare your equity grant to your salary.

Here’s how it works: Find out not only the number of options (this sometimes is all they will initially present you with), but also the strike price of those options. This price is the cost to exercise your options but also a conservative valuation for them at the time they are granted. According to Index Venture’s OptionPlan Calculator your option grant (ie number of options * strike price) should range from 25% to 100% of your annual salary.

This means is you make $100,000 per year, you can expect somewhere between $25,000 and $100,000 in options that will vest over a 4 year period. The percentage usually depends on your seniority at the company.

Onto percentage ownership. Similar to the dollar amount approach, knowing your percentage ownership isn’t super helpful without benchmarks. Luckily Peter Walker of Carta posted an awesome rundown on negotiating equity, complete with requisite benchmarks depending on the stage of your company. You can see his image below.

Peter’s argument is that pre $500M valuation, your equity should not be expressed as a dollar amount. There is definitely truth in this as early stage options should be viewed more closely to lotto tickets than a public stock, but we still find that its simpler to compare dollars to salary. Ultimately, with his benchmarks above, that gives you 2 ways to gauge your option grant offer. You will however need to ask the company what percentage ownership your grant represents.

Why this matters: Long winded, and still not super clear… negotiating equity isn’t a perfect science, but the moral of the story is this: just like salary, equity is an important benefit to understand and fight for.

Funding your option exercise can be expensive and a require a large capital outlay. Feel free to reach out to us to discuss your options for partnering with ESO to exercise your options risk-free.

The ESO Fund does not provide legal, financial, or tax advice.

May's Top Ten:

  1. Anthropic announced its first employee share buyback, valuing the company at a staggering $61.5 billion. The deal gives eligible employees the chance to sell up to $2 million in equity, providing long-awaited liquidity. The buyback signals confidence from both employees and secondary investors in Anthropic’s enterprise trajectory and Claude AI roadmap.

  2. OpenAI hired Instacart CEO Fidji Simo to lead its Applications team.
    Simo, who also sits on OpenAI’s board, will oversee consumer-facing products including ChatGPT and potentially new enterprise tools. Her appointment points to OpenAI’s shift toward building durable product organizations and more structured business units.

  3. Skild AI is in talks to raise $500 million at a valuation of $4.2 billion.
    Backed by Lightspeed, Jeff Bezos, and SoftBank, Skild is developing foundational AI models for robotics. The raise, if finalized, would be one of the largest growth rounds this year and a strong signal of investor conviction in embodied AI platforms.

  4. OpenAI acquired stealth-mode startup Windsurf for approximately $3 billion. Previously known as Codeium, Windsurf was developing advanced developer tools and AI-assisted coding infrastructure. The deal strengthens OpenAI’s engineering stack and may serve as a competitive countermove to GitHub Copilot and Replit’s growing traction.

  5. Not all AI companies are flying high, with Cohere falling 85% short of its internal revenue forecast. The company had forecast $450 million in 2024 revenue but is on pace for just $70 million. The miss underlines the challenge of converting enterprise AI interest into real contracts, even with well-funded LLM infrastructure plays.

  6. Chime filed to go public, targeting a valuation of $9.5 billion. The digital bank aims to raise $832 million by selling 32 million shares at $24–$26 each. While this is a significant haircut from its $25 billion peak valuation in 2021, a successful IPO could mark a turning point for late-stage fintech.

  7. Builder.ai filed for bankruptcy amid fraud allegations over its AI claims.
    The London-based company reportedly relied on hundreds of engineers masquerading as AI. Once valued at $1.5B and backed by Microsoft, Builder.ai’s implosion is a cautionary tale for investors rushing into opaque AI startups.

  8. Abridge is raising a new round that would value the company at $5 billion.
    The healthcare AI firm is known for clinical transcription tools used by major health systems. If the round closes as expected, Abridge would join a small group of AI startups breaking into enterprise healthcare at scale.

  9. Hinge Health goes public, raising $437.3 million in IPO. Digital physical therapy provider Hinge Health successfully debuted on the New York Stock Exchange under the ticker "HNGE" on May 22, 2025. The company priced its shares at $32, the top of its expected range, and raised approximately $437.3 million. On its first trading day, the stock opened at $39.25 and closed at $37.56, marking a strong market reception.

  10. MNTN's IPO sees shares surge over 60% on debut. Connected TV advertising platform MNTN, with actor Ryan Reynolds as its Chief Creative Officer, launched its IPO on May 22, 2025, pricing shares at $16 each. The stock opened at $21 and closed at $26.36 on its first day, reflecting a 64.75% increase from the IPO price. The offering raised $187.2 million and valued the company at approximately $1.6 billion.

Why this matters: This month was marked by major developments in AI and fintech, including blockbuster acquisitions, IPO moves, and a high-profile bankruptcy. OpenAI continues to dominate headlines with both strategic hires and billion-dollar bets, while cracks are starting to show in overvalued AI ventures.

Startups that are hiring!

Open positions are per the company's website.

About ESO Fund

ESO Fund empowers startup employees to turn their stock options into reality. Since our inception in 2012, we've been dedicated to providing risk-free funding for the exercise of stock options, ensuring that individuals can seize the opportunities embedded in their equity.

Our mission is simple: to make equity compensation accessible and understandable. Through our innovative solutions, we've assisted countless individuals at 650+ companies in realizing the full value of their stock options, contributing to the success stories of numerous startup employees.

For more information on ESO Fund and how we can help fund your option exercise, please refer to our website at www.esofund.com!