Fundraising Operations
Equity Benchmarks: Check the Comparison Before Using the Number
An equity benchmark is useful only when you know what it measures.
What you will learn
- Check whether equity benchmarks use comparable units.
- Keep reported grant size separate from actual proceeds.
- Build a source-and-cohort comparison card.
An equity benchmark is useful only when you know what it measures. Before comparing a grant with a reported median, check the instrument, role, company stage, observation date and denominator. A familiar percentage can still describe the wrong population.
Ask what sits behind the number
A source may report units, grant-date reference value, an ownership percentage or annualized compensation. Those are not interchangeable. FINRA’s stock-award questions distinguishes the underlying award types. A benchmark of options should not quietly become a benchmark of issued shares or spendable cash.
A fictional benchmark-comparability card
| Field | Sample A | Sample B |
|---|---|---|
| Population | New hires at private seed companies | Existing employees at public companies |
| Role | Individual-contributor engineering | Mixed departments and seniority |
| Award | Option grant | RSU refresh |
| Reported number | 0.12% at grant | Dollar value per year |
| Denominator | Specified fully diluted share count | Reference stock price and annualization rule |
| Observation window | A named prior 12-month period | A different observation year |
| Direct comparison | Not established | Not established |
Neither sample is a market finding: both are invented to demonstrate a mismatch. A user cannot conclude that 0.12% is a fair grant, that one group is paid more or that the examples represent current hiring practice.
Work a denominator mistake
A fictional grant contains 12,000 options. Against a supplied 10,000,000-unit fully diluted denominator it represents 0.12%. Against 8,000,000 issued shares, the same numerator gives 0.15%. The change is a measurement choice, not an extra 3,000 options.
If a benchmark uses the first denominator and your comparison uses the second, the apparent difference can be entirely artificial. Record the numerator, denominator, inclusion rules and as-of date before discussing a gap. The cap-table review checklist shows how to trace an ownership basis back to its supporting records. Do not assume that every provider defines fully diluted capitalization identically.
Read the methodology, not just the headline
- Was the sample collected from actual records, a survey or job postings?
- Does it count grant events, people or companies?
- Are new-hire and refresh grants separated?
- Are roles, locations and company stages comparable?
- What was excluded, and when were the observations collected?
- Does the source disclose a sample size and the meaning of its percentile?
Missing information is a reason to qualify the comparison, not fill it with a confident estimate. A large overall sample does not prove a small role-and-stage subgroup has useful coverage. A median does not prescribe what an individual should negotiate or what a company should grant.
Use the result as a better conversation starter
Write one sentence naming the comparison you can support and one naming what remains unknown. For example: “Both sources describe option grants, but we have not matched the denominator or role level.” Bring that question to the responsible company team rather than citing an unexplained percentile as a verdict.
The benchmark-literacy lesson explains medians and outliers more generally. Keep the source excerpt, its methodology and the next question connected in Finta. Do not upload confidential compensation datasets to an assistant merely to create a comparison.
About this lesson. By Finta Editorial Team. Sources checked November 14,2026. Examples and exercise amounts are fictional. General education, not individualized legal, tax, accounting or investment advice. Confirm actual terms with the responsible company team and qualified advisers.