Pulled out of apple post. We can link to this from that doc.
The market value will be the same in both cases. You may elect to communicate the dollar value of the options based off of the amount you are raising at and add it to their salary package to give a total USD package.
It is also advisable to communicate that the exercise price of their options will be your 409a valuation price calculated by an independent party – this number is generally much lower. Strike price X number of options reflects the out of pocket spend required by the hire in the future and is also wise to communicate as it is often surprisingly low.
While the employees % ownership will be the same in both cases, Cooley advises that when you communicate about options you:
“try to avoid expressing option grants only as a percentage in the formal legal documents unless requested by the recipient. It can lead to problems later, usually because the recipient didn’t understand that his or her options would be subject to further dilution as the company issued more shares through option grants, fundraising, etc.”
**Reminder to add recommendation about 10% option pool/round. Could also give guidance on how many options to give out. This article is pretty good but for UK startups: https://seedlegals.com/resources/how-much-equity-should-uk-startups-give-employees/