Understanding Startup Employee Equity
If equity is a significant chunk of your compensation, you should understand it as well as you understand your base compensation before you join. Not knowing what % of the company you own, or how much money you make in different scenarios, is the equivalent of not knowing whether you're getting paid your salary number in US dollars or Japanese Yen.
Open Guide on github. Extremely thorough but a little long. It's worth skimming. Also if you want to dive super deep, links to a ton of extra resources at the bottom.
This is the level of clarity with which we should expect employers to explain equity compensation to their employees. If they don't, at least try to get to this level of understanding yourself. Specifically - what are likely scenarios are what they mean for you.
Specific to folks joining later stage private companies, which is most people since these companies (e.g. Uber, Airbnb) hire a lot more relative to smaller startups. This stage is particularly important because you're more likely to treat your equity as "soon to be liquid" and compare it to a public company equity comp, when in fact there are big gotchas you should consider.
I wrote this a while back because I was very confused by how taxes and employee incentive stock options work. This was the only simple way I could understand how taxes work, which inform decisions that could save you 20% of what you earn from equity.