Descretionary Stock Option at Startup
I have received an offer from a startup but I can’t make sense of the stock options clause. Can anyone help me? Is this common? It reads “ We will also recommend to the Board of Directors of the Company that you be granted the opportunity to purchase up to 15,000 shares of Common Stock pursuant to our Equity Compensation Plan (the "Plan") at the fair market value of the Company's Common Stock, as determined by the Board of Directors on the date the Board approves such grant. The grant of such options by the Company is subject to the Board's sole discretion and this promise to recommend such approval is not a promise of compensation and is not intended to create any obligation on the part of the Company. Further details of the Plan and any specific option grant to you will be provided upon approval of such grant by the Company's Board of Directors.”
It sounds like a stock option with strike price set as price on grant date. They always add the standard conditional language to guard against unexpected situations.
Standard language
I don’t see any thing unusual here
All employee grants must be approved by the Board or a Board delegate. This is very standard language.
They're not giving you a strike price and reserving the right to renege on your stock grant, so they're ripping you off. Buying at "fair market value" and selling for a price that cannot possibly be above market value means you earn a $0 profit regardless of the amount of stock vested Fuck this shady company. Go work for a real company instead if they'll hire you. One that states the strike price in the offer letter
This is standard. Your equity is worth $0 until there is liquidity don’t forget that. Also let me help you. 15,000 x $1 is $15k. Say you IPO at $10 a share that’s $150k. And so on. It’s a tiny grant. Did it come with a microscope? If you IPO at $20 that’s $300k but a 4 year vest a $75k bonus per year. Ouch. See how the game works.
Sounds like they’re giving you first shot at buying stock, maybe prior to IPO?
But it’s saying they can chose to not give it to me
Right. So it’s meaningless