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Can anyone who's been though an IPO comment on what happened to the early employees with their 0.1% stake (of the original 10 million shares)? Everyone understands that they'll get diluted with new rounds, but when I read that Dorsey's giving away 40,000,000 shares I wonder what happened to the poor sap who started with 10,000. Do companies typically issue more options or RSUs to existing employees? How many?

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Varies from company to company. But every startup I've been in, and a couple of larger companies, gave "refresher" grants to folks annually. That keeps employees from being fully vested and helps skew equity toward the employees who are contributing the most.

Dilution isn't the only possibility here. Stock splits also happen.

Thanks. I was wondering about that, but had never heard of a split in a private company.

It's more common than you think. I was an early engineer at ZenPayroll (now Gusto) and they split the stock 10-to-1 in their last round.

As the company grows and the value of the stock goes up, it becomes difficult to give granular stock options.

Rarely publicized because it doesn't mean anything. Owning 5/1000 shares or 50/10000 is the same.

The split definitely helps nudge a new hire to be happier with the offer, all things, being equal, because many hires are still unknowledgeable about the fact that the number of options is irrelevant (like you say), and there is also the subconscious satisfaction of seeing big numbers next to our names that is hard to fight.

McDonalds has done it 12 times.

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