Why probability of exit of series B company lower than series A? That sounds, at least, counterintuitive.
TLDR Stock Options
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Re: TLDR Stock Options
#12Nice app! I have to admit this made me chuckle:
> Instead of trying to get the right answer, we set out to build a tool that could get an answer.
I'm curious though, from where did you get the numbers about the likelihood of an exit? I thought it was pretty interesting that a Series C is statistically less likely to make you money than a Series A, according to this.
Re: TLDR Stock Options
#13Something feels off with the data here. 65% of Series A companies will never exit, but 71% of Series C+ companies will never exit? Edit: Thought about this a little deeper and it is possible with a lot of companies exiting prior to the Series C, but suspect the data set of Series C+ companies may just be too small?
Had the same thought. Maybe money masks problems?
Re: TLDR Stock Options
#14This is fantastically useful both as a side-of-the-barn estimator, and a teaching tool. Thanks!
Two things a lot of startup employees are unaware of that are worth highlighting: they actually have to buy their options, which eats into returns, and that if they leave the company they have a limited window (30 days, typically) in which to do so. In would behoove them to save/plan for this fact.
Re: TLDR Stock Options
#15Nice app! I have to admit this made me chuckle: > Instead of trying to get the right answer, we set out to build a tool that could get an answer. I'm curious though, from where did you get the numbers about the likelihood of an exit? I thought it was pretty interesting that a Series C is statistically less likely to make you money than a Series A, according to this.
Hi! I'm the engineer :) I used two sources of data: https://www.cbinsights.com/blog/venture-capital-funnel-2/ which was specific to tech companies and http://files.pitchbook.com/pdf/PitchBook_1H_2016_VC_Valuatio... which covered more than just tech companies. Both only consider companies backed by American VCs.
Interestingly, data I found from 2010 was very different. It seems like more recently the popularity of early acquisitions (especially in biotech) and more robust seed funding have shifted the distribution of outcomes. It could definitely change again: success rates are by no means consistent.
Re: TLDR Stock Options
#16Bookmarked!
Re: TLDR Stock Options
#17Something feels off with the data here. 65% of Series A companies will never exit, but 71% of Series C+ companies will never exit? Edit: Thought about this a little deeper and it is possible with a lot of companies exiting prior to the Series C, but suspect the data set of Series C+ companies may just be too small?
The data set is definitely small (CB Insights data only had 61 companies that raised four rounds, for example), but it also surprised me how many Series C companies failed to raise. It might be because earlier acquisitions are an easier exit than trying to become a self-sustaining company with predictable growth? I would love to see more exploration of that question, though.
Re: TLDR Stock Options
#18Our goal with building this was not to be comprehensive, but to give founders and employees a way to have a more productive conversation about options and what they are worth. Too many startup employees I meet don't properly value the options they have, and too many potential hires don't negotiate for the right things, and wind up disappointed. We hope this will take a small step towards correcting this problem.
Neat tool, I was able to put more than 100% ownership into a Company though and I don't think that should be possible.
If you press "9" enough times: http://imgur.com/a/wUvOy
Re: TLDR Stock Options
#19Needs an NPV field and equivalent effective average salary difference per year. :-)
Re: TLDR Stock Options
#20Nice app! I have to admit this made me chuckle: > Instead of trying to get the right answer, we set out to build a tool that could get an answer. I'm curious though, from where did you get the numbers about the likelihood of an exit? I thought it was pretty interesting that a Series C is statistically less likely to make you money than a Series A, according to this.
Hi! I'm the engineer :) I used two sources of data: https://www.cbinsights.com/blog/venture-capital-funnel-2/ which was specific to tech companies and http://files.pitchbook.com/pdf/PitchBook_1H_2016_VC_Valuatio... which covered more than just tech companies. Both only consider companies backed by American VCs. Interestingly, data I found from 2010 was very different. It seems like more recently the popularity of ear…
Serious question: Would you have enough data at this point to tell me how many lottery tickets I could buy to replace the odds of winning on startup options based on option metadata (startup round, options granted, etc)?
Think of it as investment diversification.