In addition to cash payments, many of those who work for a technology start-up company receive some form of equity-linked compensation that often has an earnings potential much larger than the actual compensation received.
Restricted Stock. As described above, it is the stock issued to a service provider without the right to sell it until certain vesting conditions, usually, a vesting period, are met. For US persons, it is usually recommended to make the 83(b) election. The election prevents the ordinary income inclusion by the service provider as the stock vests and the value of the company grows. Without the money to pay the tax, such an Read More