21–30 of 213 posts
Then clicks the down arrow again. Negative numbers ensue.
True story, except I'm not usually a QA engineer.
Correct me if I'm wrong. But from what I tested you get $0 unless the IPO/sell is over $40M. No matter if Seed or Series C or how much of the company you own.
Typical grants for post-series A employees (the 10 to 50 first employees) are at least 10X more than that. With that calculator, you get something (~ $20K) for a $40M exit. Not 0. Not amazing either.
Correct me if I'm wrong. But from what I tested you get $0 unless the IPO/sell is over $40M. No matter if Seed or Series C or how much of the company you own.
(Exit Price Correct me if I'm wrong. But from what I tested you get $0 unless the IPO/sell is over $40M. No matter if Seed or Series C or how much of the company you own.
Correct me if I'm wrong. But from what I tested you get $0 unless the IPO/sell is over $40M. No matter if Seed or Series C or how much of the company you own.
This was one of the places where the model could be a lot more accurate, but at the cost of much more complicated math.
This 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.
The price of the options eating into returns is reflected in the number we present (we assume a consistent valuation growth by stage and at exit), but taxes aren't and those can 40%+ in the US, which people don't necessarily expect. Limited exercise windows are one of the things we have in the list of ways this can go horribly wrong, but you are right that it is something that you can plan for if you know it's coming.
Thinking about it, that and early exercise might both be candidates for some sort of "list of questions to ask" tool...
This 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.
This means you can find yourself valuing stock options very little, even in cases where you have full faith in the company making it and being very profitable. A growing company is very different year to year. What are the chances that you'll love the same company in 6 years?
My personal calculation is that I have a 50% chance of leaving a job every year, so if I am guessing that it'll take 6 years to IPO, and I don't think I can just keep large amounts of money frozen in options, I have to discount the value of said options over 95% on top of the traditional calculations. RSUs from he big four don't have that problem.
Our 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.