Restricted stock is company stock granted directly to a founder or early employee, subject to a vesting schedule, as distinct from a stock option, which grants the right to buy shares later rather than the shares themselves.
Restricted Stock Awards (RSAs) are typically used for very early employees and founders, when the stock's value is low enough that an 83(b) election can lock in a minimal tax cost upfront. Restricted Stock Units (RSUs), more common at later-stage or public companies, are a promise to deliver shares once they vest, taxed as ordinary income at the time they actually vest rather than at grant.
The distinction matters most around timing and taxes: RSAs paired with an early 83(b) election can be very tax-efficient for a founder joining pre-value, while RSUs make more sense once a company's stock has real, established value and an early tax election wouldn't offer much benefit.
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