It confirmed that these days if a startup is successful the founder gets almost all of the reward, the first handful of engineers get a few million bucks, and the thousand+ people that follow simply get a regular salary. There are only two real paths to wealth in tech nowadays: start your own thing or work for FAANG.
Anecdotally, I work for an engineering firm and within 4 years I was able to go from zero savings to a quarter of my retirement. It can be miserable sometimes, but I'd take miserable and retire in my 40s at this point.
I can buy 20,000 shares at $3/share over 4 years. We got a second round of VC funding in Spring with a valuation of $250M. Let's say in 5 years, we go public, I had exercised all my options, and we end up being worth $25B. Would that mean the $60,000 I spent on shares would be worth $6M?
Would another round of VC funding affect this?
Or is there more information needed that I don't know and might not have access to?
If there is a 25B valuation and 25B shares at the time of sale, your shares would be worth 20K (and you overpaid).
If there is a 25B valuation and 25 million shares, you would be worth 20M
https://carta.com/blog/equity-101-stock-economics/
If your options were priced at the $250 million valuation, and no dilution occurs, the stock value would be 3$*IPO valuation/$250M.
Dilution events are pretty common, even for companies that are revenue positive.
I would recommend viewing the options as a potential windfall, but not part of any compensation evaluation or financial planning.