Received offer at unicorn. They won’t share actual company value. Equity is stated as $100,000 in stock options How do I understand the value of this equity grant without knowing how many shares it equates to, or the value of the company? Some value must be assigned to a share in order to convert $ to shares. Is it typically the FMV? Or the amount paid for a preferred share in the last raise? Or something else? #equity #startup
run away
It does not make sense to me! You can ask them number if stock options and strike price. Also what’s their 409A price . That would help you estimate your payout!
Wait isn't it simply NumOptions * (Preferred Price - Strike Price). Where preferred price == fmv based on last 409a.
Ask them how they arrived at $100k Usually the option strike price is the last FMV. the value of the shares is just a pure guess unless theres an active secondary market for those shares.
Ask for 409a, strike and fmv. If they refuse to give that, walk away. Dm me for more info on how equity works pre ipo
Do you mind if I get in touch for understanding equity?
How does startup equity work? Am I only getting a salary and just the right to buy stock, or is stock subsidized?
You shouldn’t accept any pre-ipo job where they refuse to tell the number of shares you are granted, the total shares outstanding for the company, strike and the current 409a/fmv evaluation
Yeah it’s a huge red flag otherwise
Is the strike price usually not just the current 409a price?
I had a similar offer from hiya. I chose to walk away.
Big red flag if they’re not willing to share how they calculated the value. Also paper value is not real value until there’s an exit, either IPO or secondary. Try to get a 10 year exercise window so you don’t end up losing money: https://www.productlessons.xyz/article/how-stock-options-for-employees-work
Check out https://app.startupequity.org/search. They let you search people's startup compensation based on a variety of parameters. They also have an educational page with tons of information about startup equity https://app.startupequity.org/learn.
this doesn’t even work.. please stop posting this link everywhere…
Useless link
It is equal to nothing until ipo... I worked at wework for two years...
Depends on the secondary market and liquidation events actually
I guess... But that did not happen very often... I am glad I took advantage of it when I did