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What about if the valuation was super low when you received the options agreement? For instance, if I got $5,000 worth of options when the company was “worth”
by chamomeal 2y ago
What about if the valuation was super low when you received the options agreement?
For instance, if I got $5,000 worth of options when the company was “worth” 1 million, is that a safe bet to buy into?
Like surely the founder would be able to sell the company for 1 million dollars instead of crashing and burning… right?
- pjc50 2y ago> surely the founder would be able to sell the company for 1 million dollars instead of crashing and burning That is absolutely not guaranteed at all! It's not even guaranteed that the next funding round will be on a better basis, or not dilute you. The pre-IPO market for companies is illiquid and bad at price discovery.
- rrr_oh_man 2y ago> That is absolutely not guaranteed at all! It's not even guaranteed that the next funding round will be on a better basis, or not dilute you. It's not even guaranteed that there will be a funding round at all. Raising money is extremely hard, for most companies.