How to write a startup offer letter

A startup engineering offer letter must spell out six numbers in plain language: base salary, the equity grant (as a share count and a percentage), the strike price, the vesting schedule, the start date, and the date the offer expires. If a candidate has to email you to ask what their options are worth, the letter has already failed. This post is about the document itself, not how to win the negotiation that precedes it. For that, see how to make a startup offer candidates accept and how to close an engineering candidate.

None of this is legal advice. Your counsel or a service like Carta should generate the binding grant documents and the final letter. What follows is how to make the offer clear, because clarity is what gets a strong engineer to sign instead of stalling while three other companies court them.

What every engineering offer letter must spell out

There is a formal offer letter (the at-will employment terms your lawyer drafts) and there is the part the candidate actually reads to make a decision. Both matter. The decision-driving section needs these line items, stated as exact numbers, not ranges:

• Base salary. One number, annual, in dollars. "$185,000 per year, paid semi-monthly." Not "competitive" and not a band.
• Equity grant. The share count, the option type (usually ISOs for US employees), and the percentage of fully diluted shares that grant represents. A count alone is meaningless without the denominator.
• Strike price. The exercise price per share, tied to the most recent 409A valuation. State the 409A date so the candidate knows how fresh it is.
• Vesting schedule. Standard is 4 years with a 1-year cliff, monthly thereafter. Spell out the cliff explicitly.
• Start date. A real date, or "to be mutually agreed," not silence.
• Offer expiration. The date and time the offer lapses. More on deadlines below.
• Benefits and logistics. Health coverage, remote or onsite expectation, and any sign-on or relocation amount. Engineers comparing offers want the full picture, not just base.

How do you present equity so a candidate can actually understand it?

Most offer letters bury equity behind a single share count, then act surprised when the candidate underweights it. Engineers have learned to discount what they cannot value. Your job is to remove the discount by doing the math for them, in the letter.

Present the grant three ways at once: the raw share count, the percentage of the company on a fully diluted basis, and the current paper value at the last preferred price. Then state the strike so they can see the cost to exercise. Here is a worked example for a Series A backend hire (illustrative, not advice):

Notice what this table does. It shows the upside (the $168,000 figure) without hiding the cost ($44,000 to exercise) or the risk (paper value, not cash). A senior engineer trusts an offer that is honest about the downside far more than one that quotes only the dream number. If you want to go deeper on how that grant grows or shrinks over time, point them to how stock options and vesting work and how equity dilution works round by round.

An engineer trusts an offer that is honest about the cost to exercise more than one that quotes only the dream number.

Add a one-paragraph plain-language note next to the table: "Options give you the right to buy 40,000 shares at $1.10 each. You earn the right to buy them over 4 years. After the first year you can buy 10,000. Buying is optional, and what they end up worth depends on the company." That sentence does more to close a candidate than another $5,000 of base. For the level you are hiring at, how much equity by stage gives benchmark percentages worth quoting against.

How long should a startup offer stay open?

Give a real deadline, and give enough room that it does not read as a threat. For most engineering offers, 5 to 7 business days is the sweet spot. Shorter than 3 days feels like pressure and pushes good candidates away. Open-ended offers let candidates shop you against slower processes and stall your pipeline.

Always deliver the verbal offer first, by phone or video, then send the written letter within 24 hours. The call is where you answer the equity questions live and gauge the real objection. The letter confirms what you agreed. Sending a cold written offer with no call attached is how strong candidates end up signing somewhere warmer. The whole sequence is covered in how to close an engineering candidate.

What do startup offer letters most commonly leave out?

The omissions are predictable, and each one creates a follow-up email that slows the close or, worse, a renegotiation after the candidate talks to a friend who knows what to ask. Close these gaps in the first draft:

1. 01The denominator. A share count with no fully diluted percentage. This is the single most common omission and the one candidates notice most.
2. 02The 409A date. A strike price floating without its valuation date. Stale 409As change the math.
3. 03Early exercise and 83(b). If you allow early exercise, say so. It is a meaningful tax lever for the candidate and a reason to choose you. (Not tax advice.)
4. 04Acceleration terms. Single or double-trigger acceleration on a change of control. Senior and founding hires will ask. Silence reads as "none."
5. 05The vesting commencement date. Often assumed to be the start date, but spell it out so there is no dispute later.
6. 06Post-termination exercise window. The default 90 days is candidate-unfriendly. If you offer a longer window, it is a selling point. See what happens to options when you leave.
7. 07Remote or onsite, in writing. A verbal "we are flexible" that never made the letter causes real friction in month two.

For a founding engineer, expect more questions, not fewer. They are pricing risk that later hires do not face, so they will probe acceleration, board composition, and exactly how diluted the cap table is. What to look for in a founding engineer covers who you are writing this letter for.

A clean offer letter is a hiring advantage

Most startups send muddy offers, so a clear one stands out. When a candidate can read your letter once and understand exactly what they are being offered, including the parts that are uncertain, you have signaled that this is a company that respects their judgment. That signal travels. It is also cheaper than out-bidding a better-funded competitor on base. If you have just raised and are about to send a wave of these, the founder hiring playbook covers the rest of the loop.