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Couple of things that are not correct in the article: (1) a $50,000 fee for a valuation is crazy- early stage companies pay less than 1/10th that. (2) compani

Couple of things that are not correct in the article: (1) a $50,000 fee for a valuation is crazy- early stage companies pay less than 1/10th that. (2) companies typically do not get a valuation done more than once per year. the article makes it sound like you get a new one every time you issue options, they actually have a shelf life of one-year, unless there is a new financing or other event that requires a new report to be obtained. Not saying its a good system (it's not), just odd that the NYT would get some basic facts wrong.

snarf 10y ago
The funny thing is that the author of this article is a former (longtime) investment banker. I found the line where he describes the lack of liquidity in private shares "falls especially hard on early investors who are not company employees, those so-called 'series A' or 'series B' venture-capital investors" especially amusing. As if we are supposed to feel more sorry for VCs who are diversified in many investments than employees who aren't.
jeronpaul 10y ago
I completely agree with this. 1) I have never seen a startup pay anything close to that. 2) you are so right--you generally only need 1 every 12 months (at most!). There are some exceptions but they are rare. Some valuation providers sell 409As as if you need them monthly or something. That is absurd.
jeronpaul 10y ago
I completely agree with this. 1) I have never seen a startup pay anything close to that. 2) you are so right--you generally only need 1 every 12 months (at most!). There are some exceptions but they are rare. Some valuation providers sell 409As as if you need them monthly or something. That is absurd.
df3 10y ago
I would imagine that it could also be bundled in with the other legal and tax services a growing startup requires?
gkop 10y ago
Thanks for calling out these major factual errors. I can confirm your corrections. What a terrible article!

snarf 10y ago

The funny thing is that the author of this article is a former (longtime) investment banker. I found the line where he describes the lack of liquidity in private shares "falls especially hard on early investors who are not company employees, those so-called 'series A' or 'series B' venture-capital investors" especially amusing. As if we are supposed to feel more sorry for VCs who are diversified in many investments than employees who aren't.

jeronpaul 10y ago

I completely agree with this. 1) I have never seen a startup pay anything close to that. 2) you are so right--you generally only need 1 every 12 months (at most!). There are some exceptions but they are rare. Some valuation providers sell 409As as if you need them monthly or something. That is absurd.

jeronpaul 10y ago

df3 10y ago

I would imagine that it could also be bundled in with the other legal and tax services a growing startup requires?

gkop 10y ago

Thanks for calling out these major factual errors. I can confirm your corrections. What a terrible article!