Startup vs. Big Tech Comp Calculator (2026)

You have a startup offer on the table. Base is lower. The equity could be worth a lot — or nothing. This calculator models both offers year by year, computes the cash shortfall, and tells you what exit valuation the startup needs to reach for the equity to make up the difference.

How to read these results

The cash shortfall is the minimum the equity must be worth

Taking a lower base to join a startup means forgoing real, taxable income every year. That gap compounds — money not earned is money not invested. The cash shortfall figure is the floor: startup equity must be worth at least that much on an after-tax basis just to break even with the big tech package. Anything above that is the return on the career bet.

Dilution is not optional — it's arithmetic

Your equity percentage at the time of the offer is not what you'll hold at exit. Every future funding round that issues new shares dilutes existing holders. A series B company that raises a series C and D before exiting will typically see employees diluted by 25–35% of their original stake. The calculator applies stage-appropriate dilution estimates to the exit-scenario table:

• Seed: approximately 3 future rounds at ~20% dilution each — you keep ~51% of your current stake.
• Series A: ~2.5 rounds at ~18% — you keep ~61%.
• Series B: ~1.5 rounds at ~15% — you keep ~78%.
• Series C / D+: ~0.9 rounds at ~10% — you keep ~92%.

These are estimates. Capital-efficient companies that reach profitability quickly dilute less. Companies that raise continuously can dilute far more. Ask the founders their plan for future funding.

Liquidation preferences are a separate risk on small exits

Preferred stock (held by investors) carries a liquidation preference — the right to get paid first in an acquisition. On a small exit where the proceeds barely cover what investors put in, common shareholders (you) can receive very little or nothing even though the company "sold." The exit scenarios show your gross equity on the assumption that the exit is large enough for preferred to convert to common (typical when exit value significantly exceeds total capital raised).

For exits near or below the total capital raised, your actual payout may be a fraction of the gross figure. Always ask: (1) total capital raised by all preferred series, (2) whether any series has multiple-liquidation-preference or participating preferred terms. These details dramatically affect small-exit math.

Tax treatment of startup equity

Startup equity taxed at long-term capital gains rates (held >1 year from exercise) is meaningfully better than RSUs taxed as ordinary income at vest. For high earners: RSUs at 37% federal vs. equity gain at 23.8% (20% + 3.8% NIIT) federal — a 13+ point spread. This is partially why the after-tax comparison can favor the startup on strong exit scenarios even when pre-tax the numbers look closer.

For stock acquired before exercise, the clock starts when you exercise (for ISOs/NSOs), not at the grant date. Early exercise with an 83(b) election can start the clock immediately — potentially qualifying for QSBS and long-term rates from day one.

QSBS: up to $15M tax-free under OBBBA (§ 1202)

If your startup meets the Qualified Small Business Stock requirements — C-corp, under $50M in gross assets at issuance, active trade or business — gains on qualifying shares can be excluded from federal income tax entirely:

• 5+ year hold (post-OBBBA): 100% exclusion, up to $15M of gain per issuer.¹
• 4–5 year hold: 75% exclusion, remainder taxed at 28%.
• 3–4 year hold: 50% exclusion, remainder taxed at 28%.

The $15M limit and tiered structure apply to QSBS acquired after July 4, 2025 (OBBBA effective date).¹ For QSBS acquired before that date, the old rules apply (100% exclusion after 5 years, $10M cap). In either case, this exclusion can be the most valuable tax benefit available to a startup employee — potentially eliminating federal tax on millions in equity gains.

What to ask the startup before signing

• Total capital raised across all series (cumulative preferred overhang)
• Liquidation preference structure: 1× non-participating (standard), 1× participating, or 2× (aggressive)
• Current 409A per-share value and fully diluted share count (so you can cross-check the equity %)
• Any future rounds planned and approximate size (estimates the dilution you haven't experienced yet)
• Is the equity ISOs or NSOs? Early-exercise available? 83(b) instructions?
• Does the company believe it qualifies for § 1202 QSBS status?
• Acceleration on change of control: single-trigger (rare, common at startups) or double-trigger (standard)?