I signed an offer letter and the company I will be working for decreased the amount of equity granted sometime between signing and my start date due to a valuation change. They assured me that I will get the same dollar amount as before. I was just wondering how often this happens and if I can do anything about it. Edit: Here's an example. Let's say in my offer letter, I was offered 10 shares. My recruiter tells me they are valued at $100/share. However, now my recruiter tells me the valuation has changed and now the price is $200/share, which changes the amount of shares I will be getting to 5 shares instead of the original 10. He asked me to sign a document that says I acknowledge this change. PS. I'd prefer to stay anonymous about what company this is.
So you are getting the same dollar amount? Aka it didn't decrease.
Once a stock price is set, they cannot give you those shares at a lower value. You can negotiate more stocks if you don't agree with the new value of the common stock. But you should know that companies are incentivized to keep the value of the common stock low so that employees can exercise them when they join.
He might be assigned options . There was no price set.
Which company?
Don't sign it.
You are given stock options, not RSUs, right? That's typically how options work
I received both stock options and RSUs, but I was trying to simplify the example.
My take is simple : you signed up for the number of shares and not the dollar value. The dollar value is 0 unless you are able to actually execute your options and get real dollars. There are examples of so many companies whose stocks became worthless even though at some point they had billion dollar valuations . Stick to your horses unless you are desperate. You join startup for equity and potential upside. If they are playing these games, I would be cautious.
How big is the company? Did they raised recent funding? Hows the integrity of the management?
It's a midsize company, probably around 500-1000 employees. I'm not sure about the recent funding rounds. I'm also not sure about the management. So far, the technical managers I have talked to have been extremely down to earth.
Company of that size won't do such things. They might have some board meeting recently and might have increased the stock price
People are saying don't sign but you already signed 😂 they got you 😂😒I wouldn't be happy
I haven't signed the acknowledgement just yet.
Just search in Crunchbase for its funding rounds. Make a decision based on that information
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What do you mean? Is there a number of shares or a dollar amount in the offer letter?
In the offer letter, it only specified a number of shares, so no dollar amount was given. However my recruiter told me the value based on 409a evaluations, which apparently changed between signing and my start date.
You could ask them for copies of both versions of the said 409a evaluations and decide for yourself