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So let's answer option 3 first. The acquisition price can vary a lot. There's no telling what the end value is because there are too many unknown variables here
by steventruong 15y ago
So let's answer option 3 first. The acquisition price can vary a lot. There's no telling what the end value is because there are too many unknown variables here not being listed aside from the fact that you guys raised a $5M series A. Even with that, we don't know what the terms of the Series A were and if there were any liquidation preference. We don't even know if the acquisition is purely upfront, is it cash only or stocks or both, any earn outs, etc...
Chances are, if this is mostly a talent acquisition and you guys don't have much traction of any kind, I would probably assume the acquisition total isn't going to be extremely high (although I could be completely wrong). That said, at 1.5%, not sure if it'd be worth it (personal opinion). Obviously worth is relative to the individual and may differ greatly for different people. Keep in mind if there is no acceleration for early hires, your 1 year cliff is only going to 25% of that (assuming standard vesting).
As for how long you need to vest, it depends on the acceleration set to trigger at the time of acquisition. You might just end up not getting accelerated and you would vest as you normally would had the acquisition not occur. You might want to find out more info from the founders before making a decision and hope they will disclose at least something to you. I would just be honest about the fact that you're on the fence. They may need to disclose that you're thinking of leaving to the potential acquirer (or at least they should).
Without knowing much else, I am very hesitant to give any real advice here but if it was me, money aside, I would do what I enjoy more. In this case, option 1 makes the most sense regardless of financial outcome, especially if you like the product/company, the people, and the culture more (I'm assuming since you never said anything about the current startup you're in). Hope that helps somewhat
- scorion 15y agoThanks for quick and informative reply. I talked to founders; they did mention that some acceleration in conjuncture of retention package is in works. And I have a double trigger acceleration in place as well. So I am thinking of Option 3; but I don't know how practical that might be; given acquirer may want to put earn out in place. From valuation point of view; our product is compelling on paper but dont have much traction; so the biggest question I have is can that be big. A good team and decent product. If I compare offers; 5 times return on original investment will break me even in terms of my offer with new company and their valuation. So is it likely to get 5 times return in this kind of acquisition. I also have one more question; will my departure negatively impact the acquisition of company as I am one of three core engineers and joined at very early stage.
- steventruong 15y agoPossible but chances are weighed more heavily on founders, usually