VC & PE Glossary
What Is Refresh Grant?
Updated
Definition
A refresh grant is additional equity awarded to existing employees — usually options or RSUs — to maintain competitive ownership after dilution, strong performance, or tenure, without requiring a promotion.
Useful for: Founders, Investors
A refresh grant adds new equity to a current employee’s package — restoring incentive alignment after dilution, recognizing sustained impact, or matching external offers.
How it works
People teams review refresh cycles annually or semi-annually against leveling bands and retention risk. Grants vest on standard schedules and need board approval. Refresh differs from /glossary/promotion-grants tied to title changes and from new-hire grants sized for recruiting. High performers in critical roles receive larger refreshes; low performers may get none — linking equity to performance culture.
Option pool forecasts include refresh burn so founders do not surprise investors mid-round with emergency pool expansions.
Why it matters
- Founders: Proactive refresh policy beats reactive counter-offers that distort pay equity.
- Investors: Monitor pool runway; insufficient refresh leads to key departures before liquidity.
- Employees: Understand refresh is not automatic — ask how cycles work at offer stage.
Common mistake
Saving refreshes only for flight risks. By then, counter-offers cost more and team trust erodes.
Related ideas
/glossary/promotion-grant, /glossary/equity-incentive-plan, option pool, and retention.
Related terms
- Equity Incentive Plan — An equity incentive plan is the board-approved program authorizing stock options, RSUs, and other equity awards to employees, directors, and advisors within a defined share reserve.
- Promotion Grant — A promotion grant is an equity award — usually stock options or RSUs — given when an employee is promoted to a higher role or level. It refreshes ownership so compensation stays aligned with expanded scope and market benchmarks.
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Common questions
Short answers for founders, LPs, and operators