RSU Basics
What does RSU stand for?
Restricted Stock Unit.
What is dilution?
When a company issues new shares, existing shareholders’ ownership % decreases.
How are RSUs taxed?
As ordinary income when they vest/deliver.
Candidate asks: “If Ramp’s valuation goes up after I join, do I get more RSUs?”
No — your initial grant stays fixed in share count. But many companies, including Ramp, offer refresh grants over time to reward performance and offset dilution.
Offer A: Ramp — $160k base + $80k RSUs @ $65/share (4-yr vest)Offer B: Public SaaS — $180k base, 10% annual bonus, no equity.
“The cash delta is ~$20k a year, but Ramp’s RSUs have real upside potential. At $65/share, even modest growth could double that value — and you own a piece of the company’s success.”
When are RSUs taxed?
At vesting, when shares are delivered (transferred to the employee).
Why isn’t dilution automatically bad?
If company valuation grows faster than shares issued, your total value can still increase.
What does the company do at vesting to cover taxes?
Automatically withholds shares or cash — like paycheck withholding.
Candidate asks: “What if I leave right before my first vest?”
You’d forfeit unvested shares — you must reach your cliff for any equity to vest.
Offer A: Ramp — $150k + $100k RSUsOffer B: Instacart — $150k + $100k RSUs (public, stable stock).
“Instacart’s stock is mature and priced in; Ramp’s is still growing. Same dollar value now, but Ramp’s upside multiple could be 2–3× if we continue scaling.”
What’s the key difference between RSUs and stock options?
RSUs are granted shares (no purchase needed); options give the right to buy at a set price.
What is a 409A valuation?
An independent fair market valuation used to price new equity grants.
What happens to RSUs if the company is private and not yet liquid?
They may be double-triggered — delivered only at a liquidity event (IPO/acquisition).
Candidate asks: “Public stock is safer — why should I take private?”
“Safer, yes — but limited upside. Private equity is like getting in before everyone else.”
Offer A: Ramp (private) — $140k + $90k RSUsOffer B: Stripe (private) — $150k + $120k RSUs.
“Stripe’s a great company, but its valuation is already sky-high. Ramp’s growth rate and efficiency give you more upside per equity dollar — it’s about entering earlier in the curve.”
What does “delivery” mean in RSU context?
It’s when vested shares are transferred into the employee’s account — triggering taxes — not when they choose to exercise.
Candidate says: “Ramp’s already close to an IPO — doesn’t that mean the big growth has already happened?”
“That’s a fair question — and actually, being pre-IPO at Ramp is one of the best stages to join. We’ve proven the business model, hit profitability, and are still capturing market share in a massive, underpenetrated category. The IPO isn’t the finish line — it’s just the next phase of scale. Your RSUs today are backed by real fundamentals, not just early-stage hope, but they still have meaningful upside as Ramp expands globally and launches new products.”
What’s a liquidity event?
When employees can sell shares — e.g., IPO or acquisition.
“What does IPO stand for?”
(Initial Public Offering)
Offer A: Ramp — $160k + $80k RSUs (double-trigger vesting)Offer B: Cash-heavy fintech — $180k + $20k bonus. Candidate says, “But Ramp’s shares aren’t liquid.”
“That’s true — but double-trigger RSUs are a signal of quality. They vest now and deliver at IPO, which avoids tax risk. You’re building ownership that matures when the company does.”
What is a “double-trigger” RSU?
Vests with time + delivers at a liquidity event (like IPO), deferring tax until shares can be sold.
Candidate asks: ‘If Ramp’s valuation is already high, how do I still benefit from equity?
“Your grant’s value compounds as Ramp continues to grow revenue and market share — you’re earning stock in a profitable company that still has huge expansion potential.”
What’s a secondary sale?
When private company shares are sold to institutional investors before IPO.
Candidate says: “I already get RSUs at my current company — why switch?”
example answer:
“Your current equity is likely fully valued; ours still has room to grow”
Offer A: Ramp — lower base, meaningful RSUs, strong growth story.Offer B: Large public tech — higher base, RSUs at a flat stock. Candidate values security.
“Totally valid — and that’s what makes this decision personal. Ramp offers you ownership in a company that’s still compounding — your equity has room to grow. You’re trading short-term comfort for long-term wealth creation.”