Definition
Phantom stock or profit interests that mimic real equity without actually granting ownership, often used to incentivize employees without diluting founders. All the motivation, none of the control.
Example Usage
Instead of real options, they offered me ghost equity that pays out only if we exit above $100M—so basically nothing.
Origin
Executive compensation terminology, adapted to startup equity structures in 2000s
Fun Fact
Ghost equity is often tax-advantaged compared to real equity, but it's also worthless if you're acquired in an acqui-hire.
Source: Startup compensation and equity planning terminology
Related Terms
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See “ghost equity” in Corporate Speak, Gen-Z Slang, Pirate Speak, and more.
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