Question on stock option component of my offer letter
2d
8 Comments
Received an OL from a series D unicorn. The letter mentions that I “will be granted the opportunity to purchase up to 1,875 shares of Common Stock…at the FMV of the Company’s Common Stock as determined by the Board”
1. I was verbally told by the recruiter that the current value per share/preferred price is 170, but there is no mention of this on the OL itself.
2. I also understand that FMV=strike price, and that the strike price will be determined “after I join”
Are both points above normal?
comments
There is something called a 409a valuation which the company is required to get once a year (or again if a financing round occurs)
The 409a is usually a discount to the preferred price investors paid in the last round (usually like 1/3rd the price on average but gets less of a discount as rounds progress)
They cannot lock in your strike price until you join and your shares are approved by the board (usually within 3 months of your joining)
I recently accepted an offer without fully understanding the math with the strike price cost to buy taken into account and now my offer feels not as exciting