determine private market FMV of a series E start up?

6d 6 Comments

I have an offer from a Series E startup. The offer FMV is double their FMV from June last year which I find excessive give the drop in valuations since November. How can I find the best possible private market value of the options offered?

Current TC - 210k
Offered TC - 260k

YOE (5)

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TOP 6 Comments
  • Interact / Eng
    blepperz

    Interact Eng

    blepperz
    You should trust their FMV estimate. It's what they put on government forms.

    In reality FMV is probably way less. Ultimately it's what someone will pay for the company and that's obviously not a science.

    And value to you is way way way less given risk of no exit / risk of it being not worth your capital to execute your options before they expire after you leave.
    6d 4
    • Interact / Eng
      blepperz

      Interact Eng

      blepperz
      I've seen a "study" that says 80% or more of series c+ will exit. No idea how many exit for more than the latest valuation.
      6d
    • Interact / Eng
      blepperz

      Interact Eng

      blepperz
      Fwiw, I joined a series D company in 2015 that didn't exit until 2020 and I was locked up unti nearly 2021.

      I also joined a series C company that got acquired in a fire sale. Good thing I didn't sink $ into it by executing options. That's the kicker no one thinks about. If you leave, you typically have a few months to exercise your options, which can cost you 10s to 100s of thousands in real cash. You'll have to ask yourself, "do you feel lucky, punk?"

      Granted, you will have a good chance with a series E co.
      6d
  • New
    woodsyy

    New

    woodsyy
    Sounds pretty normal for startups these days honestly. Have you seen the valuations/companies that are getting funded? If anything it means you’ll make a good bit when they IPO. Just don’t hold the shares for too long after that πŸ˜‚
    6d 0