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In this tutorial, the focus is on compensating early employees in startups through stock options. Startups in the US typically offer a salary alongside stock options to incentivize employees by providing potential financial gains if they contribute to increasing the company's valuation. The discussion specifically pertains to private companies, where stock is owned by founders and select investors, rather than public companies. The concept begins with a stock option pool, which consists of shares reserved for employees and is formalized through a legal document approved by the Board of Directors, signifying a new share issuance.