Stock option explained

Nov 13 11 Comments

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 ?

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TOP 11 Comments
  • Roku de Vil
    If your company never goes public that is Monopoly money.
    Nov 13 3
    • OP
      What if they get acquired?🤔
      Nov 13
    • New Elpx23
      If they get acquired, last in (money), first out.

      So if your startup has VC funding, they’ll 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.

      It’s like a waterfall.
      Nov 13
    • New /\
      So it's possible for the company to be acquired for billions and you still get 0. There was an post on hackernews recently about such case.
      Nov 13
  • Uber yRkQ56
    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%
    Nov 13 0
  • Salesforce peaceguy
    Actual monetary number is 0 as of now.
    Nov 13 0
  • Lucidworks bf1htk3
    You can't really yet. It seems like a very early stage so options are funny money, aka $0.
    Nov 13 0
  • New yMiP15
    You ask for the strike price. What’s your YOE?
    Nov 13 0
  • Uber / Eng itsdara
    Be glad it's zero, otherwise the IRS will come after you
    Nov 13 0
  • JUUL npet
    If you’re getting a quarter percent of the whole company, you’re probably a first ~50ish employees and you hopefully are someone that believes in your product or service. I wouldn’t expect a payoff anytime soon.. probably a long road ahead.
    Nov 13 0
  • New bhbvdd
    $0.
    Nov 13 0

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