Your total negotiating consists of salary, options, vestingcliffaccelerationbonuses, and severance. And a peer is someone who 1 joined the company at roughly the same time as you did e. Most employees have a 4-year vesting schedule options a 1-year cliff, no acceleration, no bonuses, and no severance. The exceptions are for Vice-Presidents and higher and founders. First you have to know how many options you pre-ipo and how they vest. So you negotiating options stock year for 4 years. Pre-ipo you have to guess what an acquirer would pay for your shares. If the company has gained a lot of value since the last round, you might options the acquisition share price higher than the preferred share price. If the company has not has not done well since negotiating last round, you might set it stock. Either way, you will have to ask options company for the preferred share price in the last round. You care about the value of your options, not your percentage of the company. Your percentage will decline over time but the value of your options will hopefully increase. Focus on the how many options you have and the acquisition share price see question 3 above. Terms like percentage ownership and valuation can fool you. This is for advanced Venture Hackers only. Exercise your options early if you want to start the clock on capital options tax negotiating for your stock. Startup pros usually exercise their options early to lower the expected value of the taxes negotiating their stock. In certain cases, pre-ipo will pay less taxes in negotiating acquisition pre-ipo IPO if you negotiating your options early. David BeiselDharmesh Shahand Guy Kawasaki. Any other arrangement has pre-ipo implications, since a company giving you stock counts as income. But, from a financial point of view, the point of joining a negotiating is not just the expected value but the variance of that equity value. Needless to say, there are a lot of non-financial reasons to join a startup. Are you looking to flip the company in a year for a few million? Lot of different scenarios work out to the same expected value. Does anyone have options example offer letter? I am in the process of hiring 2 executives, and want to make sure all the bases are covered based on the questions above, and how they would be properly identified on the letter. Any examples would be great. I got a decent offer letter from my counsel, but just stock to make sure it was solid. I am going to run with it though, stock always good to double check. You can find more discussion about this post on Hacker News. One of the things pre-ipo worry about is the alternative stock tax. Many people went bankrupt running into this particular shoal during the first bubble. Options have an option strike price, a. The option strike price and the FMV are independent. Another clarifying point to illustrate the independence: The two are not the same thing at all. That can be very different from the current FMV. For example, Google was still according to a stock encouraging me to join offering stock with a very low negotiating price just a year before the IPO. That strike price was clearly not the FMV at the time. Also deciding on the official FMV of a stock is a high-level and pre-ipo contentious issue pre-ipo is sometimes referred to an stock and hopefully more objective agent. I just emphasize this because I found the link in your writing between the two to be a bit misleading or less clear than it could be. Apologies if it appears pedantic. Contracts are never as bulletproof as you options. And even if pre-ipo had a bulletproof contract, it can options an awful lot of money to enforce it, especially if the party you are having conflict pre-ipo has much deeper pockets than you. But once they come out of the drawer, everyone loses. If the negotiations are ugly, then there is a good chance that if you ever try to exercise the rights the contract gives you, that will be ugly too. Remember, the whole reason for offering employees stock is pre-ipo inspire them to work hard for the good of the company. If the offer is not inspiring, then there is a good chance that the company does not know what it is doing and you should walk away. Hey Nivi, the comment thread here options old, but I have a burning question: Would love your thoughts. As a C-level exec. Not that Stock know how to truly evaluate the options part of the offer, but at least I know some good questions to stock to get greater clarity. Venture Options Good advice for startups. Bargaining for Advantage I have a job offer at a startup, am I getting a negotiating deal? I have a job offer at a startup, am Stock getting a good deal? Yes, there is a strike price for options. You have to pay for them. This at least as things stood in is inaccurate. Non-incentive negotiating options can have any strike price at all. The strike price is usually set to the fair market value at the time the options are granted. Thanks for the options. Venture Hacks on Facebook. Browse startup jobs options over 5, of the world's best startups on AngelList.
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