3 ms·
This is not really very useful. How are we supposed to know what the companies' future growth rates will be?
by kjgkjhfkjf 6y ago
This is not really very useful. How are we supposed to know what the companies' future growth rates will be?
- thundergolfer 6y agoYou can't, but from that fact you shouldn't just not bother to try. They offer a knob to adjust expected stock growth, so that you're able to make your best guess.
- megaframe 6y agoYou estimate. Look at past 1yr then 5yr. get average per year. Then look at forward growth potential, maybe read the last two quarter prospectus... and kind of guess/ballpark. You could be wrong so come up with a lowest case scenario even if it's negative and a top and middle, based on best judgment. ...this all goes out the door if they are so new as to not have 5yr of stock performance or if their revenue is negative. In this case, if it was me, I wouldn't even count stock in the compensation unless I plan to sell right at each vesting.
- lumost 6y agoThe major tech players have been consistently growing for decades. The major tech players before them likewise grew for decades. It's hard to know if you're joining IBM in 2010 or Google/Apple in 2000 though. You can simplify the problem if you're comparing 150k in equity from a top-5 tech company by market cap with a 5+ year history of > 15% YoY stock growth vs. 150k in startup options. How much money are you potentially leaving on the table by not working at the large company? What does the return rate need to be on a 4 year time horizon for the startup equity to be worth it?