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>a massively valued asset that you can't sell In this case, the value is not well defined. If you don't have a market, you cannot determine the value. You ma
by jmcqk6 5y ago
>a massively valued asset that you can't sell
In this case, the value is not well defined. If you don't have a market, you cannot determine the value. You may think it's extremely valuable, but if you have no one else willing to recognize that value, then it doesn't really exist.
- tyre 5y agoThe value is precisely defined by a 409a valuation. That's the price options are offered at (the strike price) and what the FMV is.
- 6gvONxR4sf7o 5y agoAren’t 409a valuations famously gamed?
- ardit33 5y agoIt is a bogus valuation... as it is not market based. If you can't sell the stock, and nobody wants to buy it, (yes, there are startups that are in this position), then that valuation is mostly wishful thinking. Often the valuation undervalues the company as well, but that's another story.
- lupire 5y agoThat's the value when the valuation happens, which can be years before exercise.