Ever wondered why most startups issue stock options instead of shares to employees and advisors?

At first glance, shares might sound simpler… but there’s a catch.

If a company’s shares have any real value when they’re granted, that’s considered taxable income for the recipient. And when you’re not receiving any cash alongside those shares, that tax bill can sting.

Stock options, on the other hand, generally don’t create immediate tax obligations (as long as the strike price equals or exceeds fair market value).

Learn more in our blog: Startup Equity Explained: Why Issue Stock Options Instead of Shares?