Sometimes startups will allow stock option holder to early exercise their stock options, meaning they can buy shares subject to the option before they vest. If a startup permits this, and if the option holder does early exercise, then the option holder will effectively become a shareholder and the purchased shares will remain subject to vesting, with the difference being that the company has a repurchase right for unvested shares if the option holder leaves the company.
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Startups and Stock Options: ISOs vs. NSOs
Explore the world of stock options with our informative guide. Compare Incentive Stock Options (ISOs) and Non-Qualified Stock Options (NSOs), and learn why startups choose one over the other.
