FAANG Restricted Stock Units vs Startup Equity, Which is Best? (FAANG RSU vs pre-IPO stock)

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FAANG Restricted Stock Units vs Startup Equity, Which is Best? (FAANG RSU vs pre-IPO stock)

Restricted Stock Units or RSUs are an agreement between a company and an employee regarding the issuing of stocks or the cash value of a stock at a later date. Now these are neither stock, nor options to buy stock at the strike price. They’re units, with each representing a single share or a single share cash payment that the employee will be awarded at a certain date in the future that is written into the contract as a settlement date.

Stock options are entirely different. This is a time-bound agreement from the company where an employee gets to purchase shares at the presently set or strike price. Their value at grant is naught, their value during vesting is naught, and they only have value if that employee chooses to buy the stock at the strike price at the time of the company’s IPO. You literally have to use the right to buy those shares when it becomes available or they expire, just like you get the option to sell at the IPO price or hang onto the stock until it grows.


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00:00 - Intro
02:17 - What's a FAANG
02:48 - What's a startup
03:36 - What are Restricted Stock Units
04:44 - What are Stock Options
06:03 - FAANG Restricted Stock Units
08:00 - Stock Options
09:14 - Startup Equity
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#faang #rsu #restricted stock #equity #startup #kofigroup
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