Adopting a consistent approach to equity both in how it’s granted and how it’s explained makes a huge difference in employee trust and understanding. Wealthfront’s model is a standout example.

Core principles of the Wealthfront model:

• Define philosophy up front: Set a clear, company-wide policy for equity allocation by level and role, so everyone understands the baseline.
• Standardized option pools for new hires: Reserve stock options for each level and function before you hire. This simplifies decision-making and keeps the company aligned to its hiring plan.
• Use evergreen refresh grants: Provide recurring top-up grants every 1–2 years (often at a reduced size) to reward tenure and keep equity competitive as the company grows.
• Performance-based awards: Go beyond automatic refreshers, explicitly tie larger grants to impact, not just seniority or title.
• Communicate clearly and often: Offer detailed equity education at every touchpoint (offer stage, onboarding, company updates), including the company’s current valuation and funding stage, so employees understand what their equity could be worth.
• Bake this into your hiring plan & cap table: Use a model like Index Ventures’ option plan (linked below) to forecast hiring and manage your ESOP sizing.

This approach enables a culture of ownership where employees understand not just what they are getting but why, and how it all ties to the company's long term success.

View the full Wealthfront breakdown here.

Tools & Resources

• Index Ventures Option Plan: A Seed-to-Series A playbook covering grant levels by function, plus an ESOP sizing calculator to inform cap-table planning
• Holloway’s Equity Compensation Guide: A guide on all things equity & offers including stock options, RSUs, job offers, and taxes. It is a detailed reference for both employees and managers.
• GitHub’s Open Guide to Equity Compensation: A comprehensive, open-source handbook on structuring and communicating compensation and equity plans.
• **Carta’s “Early‑Stage Founder” collection:** A ****curated series of guides and tools helping seed‑stage startup founders manage cap tables, perform equity modeling, understand dilution, and navigate fundraising dynamics.
• Ledgy’s Knowledge Base: A comprehensive hub of reports, guides, courses, and videos designed to deepen your understanding of equity management, includes cap‑table modeling and share‑plan administration and IPO readiness.
• First Round Review’s: “The Right Way to Grant Equity to Your Employees” provides a step-by-step framework based on the Wealthfront Equity Plan.

Equity Management Software Tools