How much are a private company stocks worth when it gets acquired by bigger company?
Asking for a friend, Say for example, he has 1000 stocks of 0.01$ /stock in a private startup. How will this get converted when a bigger company acquires this startup. Btw it's not the company on my profile.
Depends on what the bigger company wants to pay and the type of stock. Investors get paid out first normally.
Too many factors. Price of acquisition and ratchet for investors are big ones that can have your friend getting nothing from stocks. There's also a chance big company pays minimal for company and sets kept employees on retention plans. Lucky situation is bigger company pays at value or more and accelerate vest everyone.
You won't always be a winner. Startup company I worked at got acquired by amazon. Investors and founders (ie preferred shareholders) made out great. Common stockholders (employers and ex employees) got the shaft. I lost at least $10k after I believed the founders lies and bought shares when my options vested.
Hmm, that's bad. So you didn't any money ie. Stock value after your company got acquired?
Sorry to hear that. I wish startups would stop selling imaginary valuations.
I paid 600 USD private stock of a company while I was there (via stock options that I got by working there for a year and a half. When the company got sold to a bigger company I got a check for like 1200 USD
When my private company got acquired by Rakuten, non-manager employees got, I think, (0.005% times years of employment) of the value paid for the company. No idea if this is a good deal or not, but it worked out to be about 1.5 times the wages my unpaid overtime would have generated, so I feel like I was made whole.
If the bigger company pays .01$/stock then your friend gets 10$.