2 ms·
My buddy and I were just talking about this. A company we were modeling received $4.2M in VC funding and had 20 employees at time of purchase. The purchase pri
by grepfru_it 4y ago
My buddy and I were just talking about this. A company we were modeling received $4.2M in VC funding and had 20 employees at time of purchase. The purchase price was never advertised, but we assumed a 7x multiple on last known value and assumed the sale price at $25M. $25M turns out to be a little over $1M per employee after 4 years (company started 2012 and was bought in 2016). I asked out loud "why would you do this when you could just go to Microsoft or Apple, do less work, and make the same money in the same amount of time".
Now this price is skewed towards the investors and very early employees, but the point still stands. You will very clearly make more money working for an established corp than a startup.
- cmrdporcupine 4y agoI mean, if you explore scenarios in https://www.tldroptions.io/ https://www.tldroptions.io/ even your scenario of $1M per employee is super rare. Actual stock option agreements I've seen and heard about recently for Series A early stage startups were small fractions of a percentage point of outstanding shares, and subject to potentially many more rounds of dilution. The only time in my 20+ career I've gotten anything real out of an employer being acquired was when Google bought my employer (for just under $400m) in 2011. In that case, though, the stock conversion of my options was only part of the generous compensation package from Google. And in that case it certainly wasn't "I'm gonna go retire now" money, either.