There are many good suggestions here, though I haven't seen anyone consider a tradition binary model. Here's what I would do, knowing very little about the par

There are many good suggestions here, though I haven't seen anyone consider a tradition binary model. Here's what I would do, knowing very little about the particulars of the options that start-ups offer vs. standard options. 1. Determine my fair market total-comp at a well established company. Maybe a FAANG, or some other firm in your industry. 2. Determine how much below that number the offer is for, not including the options. This is the discount you are accepting vs. a less risk comp structure. We need to make up for this discount in the options portion of the comp. 3. Now the fun part -- model the options payout and discount it back to present to determine the effective total compensation of the offer... 3a. A few variables to define. We'll keep this simple and pretend this a single period model - eg. "what's the value in 1 year", and not "what's the value at each exercize point?" - probabilty_of_default: the likelyhood that you get nothing because the company failed, or some other reason. This is the 'risk' variable here - strike_price: the strike of the options you're being offered - price_at_expiration: the company's share price in 1 year - number_of_shares: the number of shares you'll be able to buy - interest_rate: this is the growth of cash over the 1 year - tax_rate: what you'll need to pay in taxes if you excerize 3b. The value of the options in future dollars is then: FV = (1 - probability_of_default) * (price_at_expiration - strike_price) * number_of_shares * (1 - tax_rate) 3c. To discount to present-day, you can apply the interest_rate: PV = FV / (1 + interest_rate) 4. We want PV to be equal to the discount we calculated in #2 for it to be a fair offer. You'll note that there are a lot of unknowns in 3a, and that's where the tricky part is. But this at least gives you a framework to think about it. (Now, I just did this on a whim, and I probably missed some details, so do let me know if there's any issue. But, this should be the gist of a very basic valuation)