This Employee Stock options guide looks like what every employee should have. 80-90% of staff especially newly employed do not know anything about it. Thanks for sharing
On the shares outstanding, something companies don't volunteer is the SHA... I just had one in hand recently where the management had the right to issue 10% more shares just before an exit. So expect further dilution on the commons at the time of a "possible" liquidity event.
It's very high level but also very useful info to share. Something management never touches on - in my neck of the woods where 409A are not required- is FMV really. People are not very educated when it comes to cap tables economics. Last time I had a CEO at series A offering 1m in ESOP at FMV. Which was $30m raised at $100m post money valuation (series A for sub $5m ARR startup) where investors got participating preferred. I didn't take the role as I know how waterfalls work... ;)
Always great to read. I see your red flag regarding shares outstanding...happened at a former employer. The CFO even knew that it was silly to mask this but founders were adamant this stayed tucked away :/
This Employee Stock options guide looks like what every employee should have. 80-90% of staff especially newly employed do not know anything about it. Thanks for sharing
Share with your friends :)
On the shares outstanding, something companies don't volunteer is the SHA... I just had one in hand recently where the management had the right to issue 10% more shares just before an exit. So expect further dilution on the commons at the time of a "possible" liquidity event.
Great article, as always OnlyCFO only hit homeruns.
I also made a post on this a few weeks ago, for anybody wanting to ready more about this, here it is:
Equity Considerations for Employees
https://bensaltiel.substack.com/p/dilute-or-not-dilute-the-startup-d6d?r=dnvri
It's very high level but also very useful info to share. Something management never touches on - in my neck of the woods where 409A are not required- is FMV really. People are not very educated when it comes to cap tables economics. Last time I had a CEO at series A offering 1m in ESOP at FMV. Which was $30m raised at $100m post money valuation (series A for sub $5m ARR startup) where investors got participating preferred. I didn't take the role as I know how waterfalls work... ;)
Always great to read. I see your red flag regarding shares outstanding...happened at a former employer. The CFO even knew that it was silly to mask this but founders were adamant this stayed tucked away :/
You can actually pay to get the COI online if you wanted to so it isn’t the secret people think it is
Even if they are a private company?
Yup