Glossary · Employee equity
Restricted stock units (RSUs)
A promise to deliver shares later when restrictions lift — usually vesting milestones or time. RSUs show up more in late-stage private companies and public firms than in tiny two-person startups.
Related: Stock options · Restricted stock
A bit more nuance▾
- Less exercise drama than options; different tax timing than ISOs.
- Early startups with uncertain 409A sometimes prefer options — context matters.
Go deeper▾
Discussion questions▾
- At what stage would RSUs become simpler for employees than options?
- How do you explain the value of RSUs in an illiquid company?
Educational reference only — not legal, tax, or investment advice. Terms vary by country and deal; ask a qualified professional when it matters.