Stock options package in Series A

Facebook alion
Mar 6 12 Comments

Was curious to what kind of equity packages are standard for a series A ~$500m valuation, ~200ppl?

I've been offered 185k base, 250k options over 4 years (at strike price).
Feel this may be a little low on the stocks but this is first startup I've interviewed with so no idea.
Does this sound reasonable for series A? What kind of equivalent would the same company potentially offer if I was to wait until they reach series B?

Current TC: 330k, 7yoe

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TOP 12 Comments
  • New -.-
    $500M valuation and 200 people is huge for a series A startup. Sounds more like series C or later. How long since Series A and how long have they been in business? 185k base is pretty decent for a startup. What's the strike price?

    If they do actually have a $500M valuation, then the only way for you to make money off of the stocks is for them to be bought for several billion dollars or go public for several billion dollars. The valuations are typically set at investment rounds with the investors, and investors get first preference to get all of the money back plus however much they forced the startup to agree to on top of the money they put in. (Example, 2x preference is common and means the investors would get double the money they put in before the founders or any employees get anything.)

    So the startup needs to grow their valuation tremendously in order for employees to get anything. You'll have to decide whether that is likely or not. If they have that many people after series a, either they have amazing traction in their market and can grow very fast from revenue, or their burn rate is huge and they're hiring way too fast without actually selling anything. Figure out what the revenue is right now and you'll know which one and whether they're going to survive.
    Mar 62
    • Facebook alion
      OP
      Strike price is 10$, preferred is 30$. 1x preference.
      Mar 6
    • Robinhood hood
      Is the number of options= 25,000? If so that looks pretty decent.
      Mar 6
  • Amazon Cynimist
    If this is indeed a "mega" series A company that did a gigantic round, keep in mind that many of these have over-raised at crazy valuations they will have trouble beating in the future. I had a VP offer from one such company (1B valuation in series A) and I declined because options are likely worthless and vastly riskier than other unicorns. Company is now teetering on brink of failure. Make sure valuation is justified by product market fit and growth.
    Mar 60
  • Remember your stock options are not worth anything unless the company becomes successful enough to have a liquidity event.
    Mar 60
  • Salesforce who dat
    Why would you take lower comp? An illiquid asset with a high risk of going to zero? You should get more not less. Unless you just want to learn or something. Don’t believe the hype. If they value you they can pay you. Stock is easier to create than real dollars. And when/if an exit happens the execs they bring in will be getting paid.
    Mar 60
  • Bossa Nova Robotics HalNTuring
    There aren't 200 people in the series a. How many shares have been issued?
    Mar 62
    • Facebook alion
      OP
      That wasn't shared
      Mar 6
    • Bossa Nova Robotics HalNTuring
      Ask. You can't tell value if you don't know how many were issued. They have to tell you. 500mm val with 100mm shares is different than 300mm shares.
      Mar 6
  • Big valuation at A means super difficult to raise the B unless the company is growing like crazy.
    Mar 60
  • Mode DvVM00
    impossible to estimate with that data. 7 yoe series A you should expect mmm 0.1 - 0.5 %. with 200 ppl and that valuation they are operating like series C so you should divide by 10.

    need way more data to evaluate. if they won’t even tell you the outstanding shares just walk.
    Mar 60
  • Depending on what the stock option agreement says you may be able sell stock (vested shares you then purchase) on the second market a la sharespost, equityzen etc — prior to an event. Also, some companies have tender offers where the company offers to buy back employees’ pre ipo shares prior to an event.
    Mar 70

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