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To my knowledge, almost all startup options have a strike price that is close to the last 409A valuation, which is typically an order of magnitude less than the
by smallgovt 8y ago
To my knowledge, almost all startup options have a strike price that is close to the last 409A valuation, which is typically an order of magnitude less than the valuation given to the company at its last private financing. Receiving options with a strike price close to the last private valuation would be highly unusual, but if it did occur, I'd advise people to value those at $0.
- deanmoriarty 8y agoWhen you say "typically", how many data points do you have? In my experience, an order of magnitude just happens when the company is at a very early stage (e.g. post seed). By the time the company is at Series C/D, the 409A valuation is typically between 1/2 and 1/3 of the last preferred round, or higher.