Sitting on an offer at a late stage startup. Two questions. 1) Does each stock option typically give the right to buy 100 shares (like in a call option), or is it right to buy one share? 2) Company is unable to provide typical numbers needed to calculate value of each stock option. Yes this is bad and yes it is paper money, still very optimistic about the financials and exit ops. But how would someone try to negotiate a larger comp if the option value is unclear? I’m willing to go a little risky and don’t absolutely need a whole lot of hard cash to get by. Current Tc: 120k salary/bonus #equity #startup #tech #options
The company could have 1,000,000 shares outstanding or 3,000,000,000. You don’t know and without that the stock option offer is meaningless. I’d reject any offer where they’re playing bs games like this.
Disagree — shares outstanding is only valuable insofar as it (together with total valuation) lets you back into valuation per share. Preferred price would be another way of getting that information directly.
We got ourselves a Sherlock! OP said they hadn’t given any information to help estimate the value of the options. So it is very safe to assume common or preferred share price was not shared. Duh.
Two articles to help you: - https://angel.co/blog/9-terms-youll-see-in-your-equity-offer-and-what-they-actually-mean - https://www.productlessons.xyz/article/how-stock-options-for-employees-work
Amazing reads!! Thank you so much
Thanks for the replies. Like I mentioned before the company is unable to provide typical info like strike or preferred price due to a reasonable event. One way I’m guessing the value aside from company valuation and financials is a they offer trade off of 1000 options for 2k salary decrease. How would one think about that?
If they don't give you any hints to evaluate what the stock is worth, it's worthless. They need to tell you some combo of official valuation, total shares, your % of the company, share price, or something. Also strike price, even if it's subject to change.
1) one share 2) if it is late stage, they should have preferred price, use that minus stoke price to calculate your TC