Is it normal for shares to be valued based on Series N+1?
I have an offer from a startup who already received Series B funding. They are offering me $200,000/4yrs in options, but they say my options will be priced based on the next round of funding (the Series C valuation). Is this a way of low balling me or is it standard practice? TC: $200k
Couldnt it be good for you ? Wont the series C valuation most likely be lower with dilution
Lol you need to think what you said again
They say they will give him 200k $ worth of option. If the valuation at series B is 20$, OP will get 10k options, but if series C valuation is 10$, OP will get 20k options. As they not used series C valuation, OP would end up having 10k options worth 10$ so only 100k $. Or am I making a mistake somewhere ?
What's the percentage?
They haven't said yet... Just "$200,000 in stock options"
maybe it’s a convoluted way of saying they are currently raising money and the board meeting to approve your options won’t happen until after the round closes and a new 409a is done. anyway this means your options are worth less since the strike price will presumably be higher
The most important thing about startups are the people there. These people look like assholes. Stay away.
It’s definitely not “normal”. But they could do it if they want to The other important thing is to ask them if it’s ISO, and if so, that you can early exercise. If they say no, they are trying to trap you and u should really consider going elsewhere. (If ur not familiar with the trap, read up on phantom AMT when exercising ur ISO)
Lowball