Actual shares granted to a recipient subject to vesting conditions — different from options in that the recipient owns shares immediately but can't sell unvested shares.
Restricted stock is actual shares of company stock granted to a founder or employee that are subject to a vesting schedule. Unlike options, the recipient owns shares immediately — they're not a right to buy shares in the future. But unvested shares can be repurchased by the company at the original purchase price if the person leaves before fully vesting.
Founders typically receive restricted stock (not options) because they're involved from the start before a formal option plan exists. The key tax decision for restricted stock is whether to file an 83(b) election. This IRS election allows you to include the value of the shares in your income in the year you receive them (when the value is near zero for early founders) rather than in the years they vest (when the value might be much higher). Missing the 83(b) window — 30 days from the grant date — can result in a large unexpected tax bill.
For employees joining after a company has set up its option plan, options are more common than restricted stock because options have better tax treatment in most circumstances.