You’ve worked hard, spent long hours building something meaningful, and earned stock options along the way.
But here’s something many employees don’t realize - your stock option termination window could start sooner than you think. Even if you’re not planning to leave your startup anytime soon, life can move fast - a reorg, a relocation, or an offer you can’t refuse can all trigger it. This is the one guide you should read now - because lack of awareness or preparation can cost you the very thing you worked for: your equity.
This edition explains what really happens when that window opens, how to prepare before it does, and gives you a checklist to help protect your hard-earned ownership.
When you leave a startup, the clock starts ticking.
Most companies give employees just 90 days to exercise their vested options - meaning to buy them and convert them into real shares. If you don’t act before that window closes, your options expire permanently.
Why people miss it? Because They never check their post-termination exercise window (PTEP).They don’t realize how expensive exercising can be until it’s too late. The good news? You don’t need to be a finance expert to unlock their value. Let’s start with the basics.
Exercising stock options isn’t just clicking a button. You’re buying shares at your strike price, and depending on your tax situation, you may owe thousands in taxes too.On average, the combined cost to exercise and pay taxes for U.S. startup employees is over $140,000 (Equitybee data). More than half of employees end up walking away from their equity because the cost or complexity feels too high (source: Carta).
Keep this list - it could save your equity one day.
Know What You Own
- Find your option grant details (strike price, vested shares, 409A valuation).
- Confirm youroption type- ISO or NSO.
- Log in to your equity portal(Carta, Shareworks, Pulley, etc.), or ask HR for help.
Know Your Timelines
- Check your post-termination exercise window (PTEP)- usually 90 days.
- Note your vesting schedule and grant expiration date(often 10 years after grant).
Even if you’re not leaving now, knowing these dates means no surprises later.
Understand the Cost
Strike price × vested shares = base cost.
- Add estimated taxes(AMT for ISOs, income tax for NSOs).
- Taxes can sometimes be larger than the exercise cost - plan early
Review the Tax Impact
- ISOs: possible AMT trigger if FMV > strike price.
- NSOs:taxed as ordinary income at exercise.
- Future sale:may trigger capital gains tax.
Read: What’s the Difference Between ISO and NSO Stock Options?️
Explore Your Funding Options
- Personal funds: full upside, full risk.
- Equitybee funding (non-recourse):exercise without using your own cash; repay only if your company exits.
- Loans or financing:usually full recourse - you owe even if the company doesn’t exit.
Think of exercising like an investment. It can be life-changing - or a total loss. Know the risk.
Get Logistically Ready
- Ask your company for exercise instructions and payment details.
- Make sure yourpersonal emailis listed on your equity platform (so you don’t lose access if you leave).
- Store copies of your grant agreement,vesting summary, and 409A valuation.
Act Before You Lose Eligibility
Missing your window means losing your options forever. Set reminders for yourlast day, exercise deadline, and funding timeline
Your stock options aren’t just part of your compensation - they’re your ownership in what you helped build. And ownership should never vanish because of timing, cost, or confusion. Understand your options early, keep this checklist close, and you’ll always be ready - whether your next move is planned or not.
Equitybee helps startup employees fund their stock options without using their own cash. Learn how it works>
We’re sending this one early - because timing matters. Learn the key tax moves to make before December 31 in Smart Year-End Moves for Your Stock Options.
Disclaimer: Equitybee is not a tax or financial advisor. Always consult a qualified professional about your personal situation.
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