What are option grants

Stock options are one of the main ways startups turn early team members into owners. An option grant gives someone the right (not the obligation) to buy shares later at a fixed price, as they earn that equity over time.

Why use option grants

• Attract and retain talent without matching big-company salaries.

• Align employees and advisors with the long-term value of the company instead of just cash compensation.

• Keep control: option holders are not shareholders until they exercise, so they do not vote or receive dividends before then.

In Mantle, option grants live in one place with their terms, vesting, documents, and exercise history, and the cap table updates automatically in the background.

Key concepts to know

Exercise price (strike price):

The price the holder pays per share when they exercise. This is usually set at or above the current fair market value (FMV) from your most recent 409A valuation to avoid tax issues.

Vesting:

How the grant is earned over time. A common structure is 4 years with a 1‑year cliff, then monthly vesting for the remaining 3 years.

ISOs vs. NSO:

In some jurisdictions, there are different tax treatments for “incentive stock options” and “non‑qualified stock options”. Mantle can store the type, but your lawyer and tax advisor should guide which to use.

Exercise:

When someone decides to turn their options into actual shares by paying the exercise price, usually within a set window (for example, 90 days after leaving).

Before you start issuing options

Make sure you have:

• An equity incentive plan approved by your board and, where required, shareholders. You generally cannot grant stock options until the plan exists.

• Standard, lawyer-reviewed grant agreements uploaded into Mantle.

• Basic stakeholder details ready: name, email, role, etc.

Creating a new option grant in Mantle

1. Select or add the stakeholder

   Pick an existing stakeholder (employee, founder, advisor, contractor) or add a new one with their contact details.

2. Enter grant details

   • Number of options

   • Exercise price

   • Grant date

   • Vesting start date

   • The equity plan the grant sits under

3. Select a vesting schedule

   Choose a standard schedule that matches your internal policy (e.g. "4y/1y cliff/monthly") or a custom schedule.

4. Attach the legal documents

   Use your approved templates. Mantle will auto-fill fields like stakeholder name, number of options, exercise price, and vesting start date.

5. Send for signature

   The recipient completes a guided signing flow. Once fully signed, Mantle marks the grant active and reflects it on the cap table.

How option grants show up on your cap table

Each grant is a separate line tied to a stakeholder and an equity plan. Mantle tracks vested vs. unvested quantities and incorporates them into ownership views and scenario modeling. This removes the need for a separate "vesting spreadsheet" as long as your grants and schedules are set up correctly in Mantle.

Things founders should watch for

• Do not casually "promise" a percentage; base offers on a fixed number of options and show candidates what that means at today's fully-diluted share count.

• For companies in the US, keep your exercise price in line with a current 409A valuation so employees are not surprised by unexpected tax consequences.

• Use a small, consistent set of vesting schedules so you are not managing dozens of one-off deals later.