mrmcd

I've posted this in a previous thread about equity options, but I made this Google Docs spreadsheet that helps model the potential payout of various stock options: https://docs.google.com/spreadsheets/d/1L-hwCRXKDwmOPqXCwQo4...

You put in your equity percent and how the "costs" associated with it-- both exercise costs, and the "opportunity" costs such as smaller salary over X years, or unvested shares at current company--- and it spits out a grid of how much your options would be worth in various combinations of dilution and exit values.

I think it'd be a good addition to a guide like this but I'm not really sure how to best integrate something like this in a .md document or another page that will run inside github. Right now someone has to make a copy to their own Google account and mess with the inputs to use it, which is a bit cumbersome.

edit: went ahead and made a issue in GH for more detailed discussion rather than doing it here: https://github.com/jlevy/og-equity-compensation/issues/27

"Is there a name for these types of pseudo-stocks?"

Fraud?

In the US at least, the strike price for options in a private company is set at whatever price the last 409A valuation was. How this is done is a bit technical, and typically something done by a specialized professional accountant type.

At any rate, the younger and riskier a company is, the lower the 409A usually is, and the more legal wiggle room they have to keep it low so common stock option grants are worth more later on.

For public companies it's whatever the stock price is on the date the option grant is made. If it goes up, the options are worth money. In general, for public companies options are vastly more easy to understand and actually cash out.

Perhaps they need a government tourism office that focuses on advertising the many wonderful hiking opportunities on the islands.

A Ministry of Scilly Walks.

One thing I read that isn't often mentioned is how liquidation preference for late rounds can drive a lot of these insane valuations.

For example, let's say you raise $250MM in a series E at a 10B post money. As a company/founder, this makes you look awesome on paper and super valuable as a company. Meanwhile, the series E investors usually have the top priority for liquidation, meaning the risk is actually pretty small, since the sale/IPO value would have to go below 250MM before you lose money.

The real people getting screwed by these paper unicorns though are the late stage employees being sold options as compensation.

This doesn't always mean that insiders are dumping stock because they know the company is doomed. Sometimes yes, but when you have a company like Twitter where a pretty significant percentage of compensation is in stock options and RSUs, then you're going to have lots of insiders selling in batches, so they can actually use that compensation to get things like houses and cars and diversified investment portfolios.

"This means that if an astronaut on the ISS listens to I'm Gonna Be, in the time between the first beat of the song and the final lines ... they will have traveled just about exactly 1,000 miles."

https://www.google.com/webhp?q=1000%20miles%20%2F%208%20km%2...

WHOA

I made a googledocs spreadsheet that modeled various equity payouts after doing a bunch of research to evaluate a job offer from a fresh Series A startup: https://docs.google.com/spreadsheets/d/1L-hwCRXKDwmOPqXCwQo4...

You put in your shares as a percentage, the cost to exercise, and the opportunity costs of taking the job for 4 years (or whatever the vesting period is.) It spits out a grid of the various payouts for various exit prices and funding round dilutions. Feel free to clone and play with the numbers or hack on it for your own needs.

Ultimately I ended up passing on the offer because they were pretty stingy on the equity, and wouldn't budge. The amount they offered would've had to be an exit well above 100M to be a "good deal" versus what I was giving up, even without considering the risk of it failing completely.