2 ms·
Early exercise minimizes the tax burden reason for handcuffing.
by hkmurakami 10y ago
Early exercise minimizes the tax burden reason for handcuffing.
- hijinks 10y agosometimes startups put the strike price below current valuation if they've raised at least their A round.
- prostoalex 10y agoThey cannot. Backdating or artificially deflating the asset price is no longer legal. What's likely to happen is new investor extracting some special terms for their investment, receiving preferred stock that's valued higher than common stock. The company then turns around and uses the product of preferred stock price and total number of shares outstanding as the new valuation number that's "leaked" to the press. The 409A valuation of the common stock is a separate dollar figure, though.