NOTE: This document is a brief overview of how equity works at Air. It is by no means all-encompassing or legally binding. It's important that you read through your equity agreements, consult with your financial and legal advisors, do your own research, and ask questions.

Air is committed to making all full-time employees equity holders in our business. We recognize the risk our team has taken by choosing to work at an early-stage startup, and we want them to be invested in our success and compensated when the business grows.

Equity can be difficult to understand and value. This document aims to clarify how equity works at Air so employees can make informed personal financial decisions.

The basics

Air offers equity to each full-time employee in the form of "options." The number of options an employee receives depends on their level of seniority, the stage of the business, and their risk tolerance when trading off cash compensation.

Employees are eligible to receive additional equity issuances in the event of a promotion or exceptional performance. These additional issuances are typically considered at each employee's anniversary with the company.

Terms to know

Our equity packages come with a few standard terms:

Additional reading on equity vesting, cliffs, and PTE windows can be found here and here.

How options work

An option is the right to buy a stock at a fixed price. That price is usually the market value of the shares when they’re granted to you. This price is set by a 409A valuation and is often called your "strike price,"or "exercise price."

Our most recent 409A valuation (as of August 28, 2020) set our common stock strike price at [XXX]. This means that in order to exercise 1 option at today's value (i.e. buy 1 share of stock), you would need to pay Air [XXX]. In most cases, this price becomes relevant when employees leave Air, because they then have 90 days to decide whether they want to exercise their vested options, or forfeit the right to buy their shares.

At Air, we offer Incentive Stock Options, or ISOs. Some startups offer NSOs or RSUs. You can read more about the differences between those here.