What happens to my stock options if the company is acquired?

It depends almost entirely on the merger agreement — and outcomes vary a lot. Here's the plain-English map of what usually happens to vested and unvested options when a startup is bought.

What's it worth?A realistic range in seconds.
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Cost to exercise?Exercise cost — plus the AMT hit (US).
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Vested, in-the-money options

These are usually the good case. They're typically cashed out at the deal price per share minus your strike, times your vested count — so if the deal values shares at $12 and your strike is $3, you'd receive about $9 per vested option, less any tax. Sometimes, instead of cash, the acquirer assumes them and converts them into options over the acquirer's stock on a comparable basis.

Vested, underwater options

If the deal price is below your strike, vested options are worth nothing to exercise and are commonly cancelled for no value. That's not a mistake — there's simply no positive spread to pay out.

Unvested options

Treatment varies widely. Unvested options may be accelerated (vested early because of the deal), assumed by the acquirer on your existing schedule, or cancelled. Acceleration often depends on whether your grant has single-trigger (vesting on the acquisition alone) or double-trigger (vesting only if you're also let go within a set period after) provisions. Check your grant.

The things that delay or reduce the payout

Escrow / holdback. A slice of the proceeds (often 10–20%) is commonly held back for a year or more to cover any post-deal claims — so you may not receive everything at close.

Earn-outs. Part of the price can be contingent on the acquired business hitting future targets, paid later or not at all.

Preference stack. As in any exit, investors' preferred shares are usually paid first — in a lower-priced acquisition, that can leave less for common and for option holders.

Read the actual terms. None of the above is automatic — the merger agreement and your own grant control the outcome. If the numbers are meaningful, have a lawyer read the deal documents before you rely on any figure.

Work out what an exit would mean for you

Before an acquisition closes is exactly when it pays to know what you hold and where it sits in the stack. The free tools and the equity toolkit help you model the outcome instead of guessing.

See the equity toolkit →

Want it on your own numbers? The Personalized Equity Report models your specific grant end to end.

Questions people ask

Do I get paid for unvested options in an acquisition?

Sometimes. Unvested options may be accelerated, assumed by the acquirer on your existing schedule, or cancelled — it depends on your grant's acceleration terms (single- vs double-trigger) and the deal. Check your grant and the merger agreement.

What happens to underwater options when a company is bought?

If the deal price is at or below your strike, vested underwater options usually have no positive value and are commonly cancelled for nothing, because there's no spread to pay out.

Why didn't I receive all the money at closing?

Acquisitions often hold back part of the price in escrow (typically for a year or more) and can include earn-outs paid later. Investor liquidation preferences are also paid before common shareholders, which can reduce what's left.