The model is intentionally inspectable.

Grantwise is built for offer conversations, not false precision. The calculator shows the assumptions, applies simple math, and makes downside cases visible.

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Formula path

From grant to net outcome

1. Ownership

Convert the grant into a real stake.

initial ownership = options / fully diluted shares

Fully diluted share count matters because it is the denominator behind your ownership. If a candidate only has the option count, Grantwise treats the result as low-confidence instead of pretending the raw option number is enough.

2. Dilution

Reduce the stake before the exit.

retained stake = stake x (1 - round dilution)

The flat dilution input is the default because most candidates do not have the cap table or future financing plan. If funding rounds are added, Grantwise compounds dilution round by round so a 15% round followed by another 15% round reduces what remains.

3. Preference stack

Pay preferred shareholders before common.

common pool = exit value - preferred stack x preference multiple

In any exit where proceeds are less than the preferred stack plus a reasonable return, common shareholders may receive zero. A $30M acquisition against a $35M preferred stack means the common pool is empty before employee options participate.

4. Strike and tax

Separate exercise cost, tax, and AMT.

net = gross - exercise cost - tax

AMT is shown separately because ISO holders can owe AMT at exercise even before a liquidity event. That makes it a distinct cash risk from income tax on exit gain, not just another line inside the final tax estimate.

5. Verdict

Turn the output into a sentence.

verdict = diluted stake + net result + context

The verdict sentence is generated deterministically from the model output, not from AI. If salary context is provided, it is used only to give the number a human scale, such as months of salary.

Why this shape

Equity needs scenarios, not a single optimistic number.

The same grant can be worthless in a preference-heavy acquisition and life-changing in an outlier IPO. Grantwise keeps both truths in the same report.

Round-by-round dilution

Use a single expected dilution number or compound future financing rounds from amount raised and pre-money valuation.

Preference-aware exits

Low acquisition scenarios subtract the preferred stack before common shareholders receive proceeds.

Exercise cost first

The model treats options as options: you still pay strike cost before calculating taxable gain and net value.

Readable verdicts

Each scenario ends with a sentence that explains the result in ownership, cash, and salary-context terms.

Decision layer

Grantwise explains the quality of the estimate, not just the number.

Grantwise Score

The score is not a prediction. It is a structured way to evaluate whether the modeled offer has meaningful upside, manageable risk, and enough input quality to be trusted.

Upside qualityDownside protectionExercise burdenDilution riskPreference riskSalary tradeoff

Confidence level

Confidence measures how complete the input data is. A low confidence result may still be useful, but it should prompt the candidate to ask for missing information.

Ownership sourceStrike priceTax treatmentDilution assumptionPreference stackExercise window

Equity waterfall

Exit value does not flow directly to employees. Preferred shareholders, exercise cost, taxes, and AMT can reduce the final net outcome.

Exit valuePreferenceCommon poolGross option valueExercise costTax and AMT

Sensitivity analysis

Sensitivity shows which assumptions move the result most, such as exit valuation, dilution, strike price, tax, and preference stack.

Exit valuationFuture dilutionStrike priceTax ratePreference stackExercise window