Definition
The right to purchase company stock at a fixed price (the strike price) in the future—essentially, a lottery ticket that employees tell themselves is definitely not a lottery ticket.
Example Usage
We offered employees 50,000 options at $0.10 per share, which would theoretically be worth $500K each if we ever had a $10 exit, which we definitely won't.
Origin
Corporate compensation standard, adapted for startups as a way to pay employees in hope rather than money
Fun Fact
Stock options are only valuable if the company has an exit valued above the strike price, and given startup mortality rates, are worth gambling money at best.
Source: Startup compensation terminology
Related Terms
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See “Stock Option” in Corporate Speak, Gen-Z Slang, Pirate Speak, and more.
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