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How to calculate the cost of stock options?
To what extent does “getting it in writing” matter for at-will employment agreements?I was given stock options but never asked about strike price/vesting and now we are being acquiredUnderstanding and negotiating stock options offerStock options offer - questions employer should answerUnsatisfactory employment contract with startupLies vs Exaggerations ? Illegal or Unethical?
.everyoneloves__top-leaderboard:empty,.everyoneloves__mid-leaderboard:empty,.everyoneloves__bot-mid-leaderboard:empty margin-bottom:0;
I'm considering working with a startup (not public). As part of my package they have agreed to grant me a 1% stake in the company over 4 years vested every year. This means that if I left after 2 years I would have .5% of a stake vested in the company. When I asked if I would have to put up any of my own money if I left early in order to keep my .5% stake in this example they said that I would have to purchase them based on their current "valuation" of the company.
So in this situation they "value" their company at $100,000,000. In order to get my .5% stake I would have to pay them:
.005 * 100,000,000 = $500,000
Or I could decline and leave with nothing.
From what I understand their previous round of investment valued the company at much less than this - probably something closer to $5,000,000. The $100,000,000 figure is a valuation (somewhat optimistic imo) that they are attempting to achieve in their next round of funding.
I haven't worked with Stock Options before - only RSUs which seem much simpler. My question - is this standard operating procedure for Stock Options? If not - what is the correct way to calculate how much one would need to spend in order to keep their partially vested stock options when leaving a not-public company?
job-offer startup
asked 44 mins ago
BrhBrh
1281 silver badge4 bronze badges
add a comment |
I'm considering working with a startup (not public). As part of my package they have agreed to grant me a 1% stake in the company over 4 years vested every year. This means that if I left after 2 years I would have .5% of a stake vested in the company. When I asked if I would have to put up any of my own money if I left early in order to keep my .5% stake in this example they said that I would have to purchase them based on their current "valuation" of the company.
So in this situation they "value" their company at $100,000,000. In order to get my .5% stake I would have to pay them:
.005 * 100,000,000 = $500,000
Or I could decline and leave with nothing.
From what I understand their previous round of investment valued the company at much less than this - probably something closer to $5,000,000. The $100,000,000 figure is a valuation (somewhat optimistic imo) that they are attempting to achieve in their next round of funding.
I haven't worked with Stock Options before - only RSUs which seem much simpler. My question - is this standard operating procedure for Stock Options? If not - what is the correct way to calculate how much one would need to spend in order to keep their partially vested stock options when leaving a not-public company?
job-offer startup
asked 44 mins ago
BrhBrh
1281 silver badge4 bronze badges
I'm voting to close this question as off-topic because it doesn't belong on this stack. Maybe try finance S.E?
– solarflare
31 mins ago
add a comment |
I'm considering working with a startup (not public). As part of my package they have agreed to grant me a 1% stake in the company over 4 years vested every year. This means that if I left after 2 years I would have .5% of a stake vested in the company. When I asked if I would have to put up any of my own money if I left early in order to keep my .5% stake in this example they said that I would have to purchase them based on their current "valuation" of the company.
So in this situation they "value" their company at $100,000,000. In order to get my .5% stake I would have to pay them:
.005 * 100,000,000 = $500,000
Or I could decline and leave with nothing.
From what I understand their previous round of investment valued the company at much less than this - probably something closer to $5,000,000. The $100,000,000 figure is a valuation (somewhat optimistic imo) that they are attempting to achieve in their next round of funding.
I haven't worked with Stock Options before - only RSUs which seem much simpler. My question - is this standard operating procedure for Stock Options? If not - what is the correct way to calculate how much one would need to spend in order to keep their partially vested stock options when leaving a not-public company?
job-offer startup
asked 44 mins ago
BrhBrh
1281 silver badge4 bronze badges
I'm considering working with a startup (not public). As part of my package they have agreed to grant me a 1% stake in the company over 4 years vested every year. This means that if I left after 2 years I would have .5% of a stake vested in the company. When I asked if I would have to put up any of my own money if I left early in order to keep my .5% stake in this example they said that I would have to purchase them based on their current "valuation" of the company.
So in this situation they "value" their company at $100,000,000. In order to get my .5% stake I would have to pay them:
.005 * 100,000,000 = $500,000
Or I could decline and leave with nothing.
From what I understand their previous round of investment valued the company at much less than this - probably something closer to $5,000,000. The $100,000,000 figure is a valuation (somewhat optimistic imo) that they are attempting to achieve in their next round of funding.
I haven't worked with Stock Options before - only RSUs which seem much simpler. My question - is this standard operating procedure for Stock Options? If not - what is the correct way to calculate how much one would need to spend in order to keep their partially vested stock options when leaving a not-public company?
job-offer startup
job-offer startup
asked 44 mins ago
BrhBrh
1281 silver badge4 bronze badges
asked 44 mins ago
BrhBrh
1281 silver badge4 bronze badges
asked 44 mins ago
BrhBrh
1281 silver badge4 bronze badges
asked 44 mins ago
BrhBrh
1281 silver badge4 bronze badges
asked 44 mins ago
BrhBrh
1281 silver badge4 bronze badges
1281 silver badge4 bronze badges
I'm voting to close this question as off-topic because it doesn't belong on this stack. Maybe try finance S.E?
– solarflare
31 mins ago
add a comment |
I'm voting to close this question as off-topic because it doesn't belong on this stack. Maybe try finance S.E?
– solarflare
31 mins ago
I'm voting to close this question as off-topic because it doesn't belong on this stack. Maybe try finance S.E?
– solarflare
31 mins ago
I'm voting to close this question as off-topic because it doesn't belong on this stack. Maybe try finance S.E?
– solarflare
31 mins ago
add a comment |
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I'm voting to close this question as off-topic because it doesn't belong on this stack. Maybe try finance S.E?
– solarflare
31 mins ago