4 ms·

I'm not trying to weigh working at a start-up vs. a late stage or public company. I'm trying to get some data on what various companies are offering for the eq

I'm not trying to weigh working at a start-up vs. a late stage or public company. I'm trying to get some data on what various companies are offering for the equity portion of their compensation, and am using "dollar value" as the way to measure this. Imputing a value isn't that difficult. In fact, this happens each time the company goes out to raise money. A lower bound to this would be the latest 409A valuation. Granted, there are still plenty of variables that can affect the overall value of the optoins, such as companies having different growth/exit trajectories, and the difference between "strike price" and "current valuation", but "dollar value" is probably the most reasonable way to compare apples to apples. Several methods of determining how many options to grant employees are based off of "dollar value"[1]. For example, if you are foregoing $100k of salary over 4 years, it makes sense to obtain _at least_ that much in "dollar value" of options. I'd like to see how much equity is actually being offered in practice. [1]: http://avc.com/2010/11/employee-equity-how-much/ http://avc.com/2010/11/employee-equity-how-much/

gumby 12y ago
Believing a 409A has any meaning beyond satisfying the IRS/sarbox ass covering is, well, your business. In any case it applies at the instant the valuation is done; typically (for all the ones I've read / paid for) uses black scholes which rarely makes sense for an illiquid startup; and in any case has no relation to what you might get out of your option package, which is ultimately what matters, isn't it. BTW for a private startup, RSUs are typically worse for the recipient than ISOs. Only at the odd unicorn might they start to make sense. But whatever floats your boat -- if you want to try to put a dollar value on something ineffable, that's your business.
- throwaway748937 12y ago
  I'm not meaning to be snarky here, but you're not really providing me with any new information. I'm not particularly interested in what the exact dollar amount that I'm statistically likely to earn after taxes is, for example. What I'd like to know is the going rate for equity packages at start-ups. I'm suggesting using "dollar value of shares granted" as the way to measure this, and am providing what I believe is the best way to arrive at that: Use the valuation that the company would receive were it to raise money. (A typical lower bound for this would be 409A valuation, but likely would be much more). I'm confident this way of valuing options grants is sensible. If you have a better way of assigning a rough estimate to options' worth that would be applicable across all stages of a company, I'd love to hear it.
  - gumby 12y ago
    But I am I'm saying your attempt to assign a dollar value is indeed nonsensical, in particular for early stage startups. That's why most people simply use percentages as their measurement of the "going rate" for early stage startups. Your complaint is that you can't get data using a different method of your preference. If you want to use your own metric it's up to you to deal with it. Not everything can be captured simply by measuring it in dollars.
    - throwaway748937 12y ago
      Just to be clear: you believe equity %age vs number of employees is more informative than %age vs company valuation?
      - gumby 12y ago
        I believe that too, especially in early stages. But my point is that trying to convert your percentage to a dollar value in order to compare offers is probably not going to result in any predictive value.
        throwaway748937 12y ago
        > But my point is that trying to convert your percentage to a dollar value in order to compare offers is probably not going to result in any predictive value. I am converting percentage into a dollar value _strictly_ for comparison between offers, and _not_ for predictive purposes.
deleted 12y ago
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gumby 12y ago

Believing a 409A has any meaning beyond satisfying the IRS/sarbox ass covering is, well, your business. In any case it applies at the instant the valuation is done; typically (for all the ones I've read / paid for) uses black scholes which rarely makes sense for an illiquid startup; and in any case has no relation to what you might get out of your option package, which is ultimately what matters, isn't it. BTW for a private startup, RSUs are typically worse for the recipient than ISOs. Only at the odd unicorn might they start to make sense. But whatever floats your boat -- if you want to try to put a dollar value on something ineffable, that's your business.

throwaway748937 12y ago
I'm not meaning to be snarky here, but you're not really providing me with any new information. I'm not particularly interested in what the exact dollar amount that I'm statistically likely to earn after taxes is, for example. What I'd like to know is the going rate for equity packages at start-ups. I'm suggesting using "dollar value of shares granted" as the way to measure this, and am providing what I believe is the best way to arrive at that: Use the valuation that the company would receive were it to raise money. (A typical lower bound for this would be 409A valuation, but likely would be much more). I'm confident this way of valuing options grants is sensible. If you have a better way of assigning a rough estimate to options' worth that would be applicable across all stages of a company, I'd love to hear it.
- gumby 12y ago
  But I am I'm saying your attempt to assign a dollar value is indeed nonsensical, in particular for early stage startups. That's why most people simply use percentages as their measurement of the "going rate" for early stage startups. Your complaint is that you can't get data using a different method of your preference. If you want to use your own metric it's up to you to deal with it. Not everything can be captured simply by measuring it in dollars.
  - throwaway748937 12y ago
    Just to be clear: you believe equity %age vs number of employees is more informative than %age vs company valuation?
    - gumby 12y ago
      I believe that too, especially in early stages. But my point is that trying to convert your percentage to a dollar value in order to compare offers is probably not going to result in any predictive value.
      - throwaway748937 12y ago
        > But my point is that trying to convert your percentage to a dollar value in order to compare offers is probably not going to result in any predictive value. I am converting percentage into a dollar value _strictly_ for comparison between offers, and _not_ for predictive purposes.

deleted 12y ago

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