But let’s be honest: employees aren’t valuing it the way they used to. The data backs that up.
Carta’s 2025 analysis shows tens of thousands of startup employees simply walking away from vested options, leaving billions in theoretical value on the table.
Other reports share that a huge portion of in-the-money grants go unexercised because the cash and tax burden is too heavy.
And surveys out of Europe show a workforce split down the middle: some still hold the “life-changing exit” dream, while just as many assume their options are worth next to nothing.
So yes, there’s a confidence problem. But it’s not because equity has stopped working, it’s because too many startups get equity wrong.
They sell the upside without explaining the mechanics.
They issue grants without context.
They rely on hope instead of education.
Too many startups treat equity like a magic word: mention it in an offer letter, throw in a number of options, and hope the narrative writes itself.
Meanwhile, the real drivers of value, such as: strike price, 409A, dilution, preference stacks, exercise timelines, remain buried in legalese or never mentioned at all.
When people don’t understand something, they default to assuming it’s not worth much. And equity is no exception.
But here’s the opportunity: the value of equity isn’t restored by changing the instrument. It’s restored by changing the conversation.
Companies that invest in clear, grounded and ongoing communication turn equity back into what it was always meant to be, a long-term incentive people can actually believe in.
The real fix is bridging the gap between equity and incentive through better communication. Think about it in two modes: active and passive.
Active communication is the human side. These are the moments where equity actually matters: hiring, fundraising updates, performance refreshes. These are the points where employees form their beliefs about whether equity is valuable. Don’t waste them. Explain the “why”, show simple scenarios, and make the upside concrete.
Passive communication is everything that reinforces the message in the background. Tools, FAQs, intranet pages, valuation updates. Anything people can return to when they’re curious or a need a refesher.
To make both work, map the entire equity journey using a simple storyboard: every moment from offer to offboarding where equity shows up. Then ask yourself: What would a 5-star version of this look like? Not perfect — just better than today.
For example, in hiring, most companies are stuck at 1-star: vague answers and hand-waving.
A 5-star version explains ownership clearly and uses worked examples.
Going further might look like building a lightweight digital equity pack that shows how value is created and where employees participate.
The same logic applies elsewhere.
When you raise a round, tell people what it means.
When grants refresh, explain the reasoning.
Each conversation builds trust.
And don’t ignore the passive layer. Employees always want to know: What’s my equity worth now? A basic approach makes them dig through HRIS data and build spreadsheets. A better one version is a simple tool that auto-calculates current and future value.
Giving your people something that is easy, accessible, empowering.
The shift here is treating equity as a storytelling problem, not a compliance task.
The return doesn’t come from grant size (although my seperate belief with equity is that companies aren't generous enough here, either) it comes from how clearly people understand what they own and how their work grows its value.
So go on. Map the moments. Upgrade the experience. Make ownership tangible.
That’s how you turn equity from an expensive exercise for your company and into a truly effective long-term incentive for talent.