RSU vs Options
Reviewed August 21, 2026 by Robb
An option is a right to buy at a strike. An RSU is a promise of shares (or cash) when it vests, with no strike to pay. Early companies live on options because a low 409A makes the strike livable. Later companies use RSUs when the price is high and a strike would be theater. Both hit the cap table. Both need a process. Neither is ‘free equity.’
RSUs
The share price is high enough that a strike is painful, you want a simpler employee story, and you can handle withholding and settlement. Double-trigger RSUs are common in private companies so tax does not hit on a paper vest with no liquidity.
Options
You are still early, the 409A is low, and employees can imagine exercising. Cheaper to understand in a seed shop. Still a grant agreement, vesting, and a pool you have to refresh at the next priced round.
RSUs that vest with no sale can create a tax bill with no cash. Options that never get exercised are not ownership yet. Explain the mechanism in the offer. Put the share count in the model. Do not sell a lifestyle on a grant the holder cannot use.
Buyers of preferred will ask for a pool. Whether you fill it with options or RSUs, the founder row moves. We model the refresh with the round, not after the close dinner.
Cap table software, 409A, board consents. If this lives in a founder’s inbox, it will be wrong at diligence. Treat equity as a subledger of the company.