Stock option explained
I was presented with stock options in one of my offer letters and wanted some help understanding if possible. its a start-up. Number of stock option: 31,070 (0.27% fully diluted) The company isnt public. How would I calculate an actual monetary number ?
Actual monetary number is 0 as of now.
$0.
If your company never goes public that is Monopoly money.
What if they get acquired?đ¤
If they get acquired, last in (money), first out. So if your startup has VC funding, theyâll recoup their investment first plus whatever terms they agreed on (could be 1.5x-2x) and money trickles down depending on how many funding Series. Founding team is next then whatever is left are the employees. Itâs like a waterfall.
Well u need to find out the current strike price u r being offered, the current 409a which should give u the valuation. Also look at future , u can assume that any further round will dilute ur stock by 15-20%
If youâre getting a quarter percent of the whole company, youâre probably a first ~50ish employees and you hopefully are someone that believes in your product or service. I wouldnât expect a payoff anytime soon.. probably a long road ahead.
Be glad it's zero, otherwise the IRS will come after you
You ask for the strike price. Whatâs your YOE?
You can't really yet. It seems like a very early stage so options are funny money, aka $0.