Pre IPO RSUs ?

Tesla / Eng
Spacesex

Go to company page Tesla Eng

Spacesex
Nov 12, 2021 103 Comments

Got an offer from a pre-IPO startup for
15000 RSUs at a $5B company valuation. Each stock worth $20 (paper money until liquidity event).
I accepted the written offer. But waiting to join until 2 weeks, background check etc etc.
The week after the company raised a new round of funding and is now valued at $10B.

I haven’t joined yet.
Did my 15000 RSUs just double in worth ?

Edit- for the sake of simplicity i did not include funding raised here but I’m expecting 10% dilution.

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TOP 103 Comments
  • Airbnb
    berrybark

    Go to company page Airbnb

    berrybark
    Yes, but 2 * NaN = NaN
    Nov 12, 2021 11
    • Reddit
      d_yes

      Go to company page Reddit

      d_yes
      Most pre-ipo companies have a double trigger for vesting, where vesting is triggered by both a date being reached and a liquidity event. They’re not considered vested until liquidity.
      Nov 12, 2021
    • Amazon
      BSHw33

      Go to company page Amazon

      BSHw33
      I think the stocks are issued on the date you join. Cross checking since the funding happened before you joined you may not likely be given at old strike price
      Nov 12, 2021
  • New
    worldstar

    New

    worldstar
    Read the offer letter. If it specifies 15000 RSUs that’s what you’ll get congrats. If it specifies a dollar value based on FMV at time of grant then sorry you’ll get fewer.
    Nov 12, 2021 6
    • Google
      dndd

      Go to company page Google

      dndd
      2x outstanding shares at 2x valuation means still $20 per rsu
      Nov 12, 2021
    • Wayfair
      bbqbois

      Go to company page Wayfair

      bbqbois
      @itsmagik often new shares are issued during a fundraising round, meaning the pre-existing shares represent a small % of the company than they used to. Hence dilution. This is often 10-30% per round, but varies by company and round.
      Nov 13, 2021
  • New
    JrbG86

    New

    JrbG86
    Are you sure it's RSUs and not stock options?
    Nov 12, 2021 9
    • What does double trigger mean ?
      Nov 12, 2021
    • Zuora
      DOtq57

      Go to company page Zuora

      DOtq57
      Facebook, it means the tax and liquidity of the equity is time-based and event-based (requiring a liquidation event, such as an IPO). You vest as you normally would, but there is no tax withholding upon vesting. Once both conditions are met (aka double trigger), there is tax withholding on all your vested stock (usually by way of sell-to-cover) and you can then sell (of course lockup rules apply).
      Nov 12, 2021
  • Affirm
    sjdirus118

    Go to company page Affirm

    sjdirus118
    Kind of. Double valuation does not mean double share price. You need to look at the dilution. A good indicator will be what the preferred share price was on the funding round. You can also look at the secondary market for true value.
    Nov 12, 2021 3
    • In my experience (Instacart + 2 other pre IPO) the dilution is usually relatively small like 2-7% per round.
      Nov 12, 2021
    • Amazon
      mez87ff

      Go to company page Amazon

      mez87ff
      You can do the math yourself. Just google term sheet and you can model how these parameters change. I agree with insta here, dilution at this stage of your company won’t be double digits. They won’t give up the inherent value of the company to inject cash. Companies have other means of raising cash without offering much equity.
      Nov 12, 2021
  • Dialpad
    zcgh@87

    Go to company page Dialpad

    zcgh@87
    yes if Rsu , no if stock options
    Nov 12, 2021 9
    • Google / Eng
      cubechain

      Go to company page Google Eng

      cubechain
      My options grant was in share #.
      Nov 12, 2021
    • New
      engineerDa

      New

      engineerDa
      @facebook but this doesn't make sense. If you were offered 15000 stock options, the only way for them to halve in value is if the company raised 100% of it's valuation in the round.
      Jan 6