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Companies cannot grant equity to employees at below fair market value without creating adverse tax consequences for those employees. Transactions like the Micro
by 7Figures2Commas 12y ago
Companies cannot grant equity to employees at below fair market value without creating adverse tax consequences for those employees. Transactions like the Microsoft investment absolutely factor into the determination of fair market value. Bottom line: just three years after its founding, Facebook had a very significant valuation.
- prostoalex 12y agoYou are correct on the bottom line, I was just pointing out that mainstream media's definition of valuation = number of all stocks * the price per share of the latest transaction, no matter what preferred dividends, liquidation preferences or special side deals are thrown in to close that deal.