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Ask HN: Specific stock option evaluation advice

2 点作者 pepperman大约 13 年前
Haven't been able to find any info on this stock option evaluation question anywhere, so would very much appreciate your advice.<p>I've been an early engineer at several start-ups now. Some angel funded and some VC funded. Some have done well and others have had nothing happen at. I've always gotten decent stock options and although the specifics are different across the board, the strike price multiplied by the number of shares has always been "affordable" to pay out of pocket, say in the $3-5k range. For example, a $3k options exercise check to the company would be for 30k shares at $.10 for an earlier stage co, or 1k shares at $3 for a later stage co. This made it easy to exercise the options when leaving the company (at any vesting point). I didn't have to wait until the company failed/IPO'd/got bought if I wasn't passionate about working there anymore, but could still walk away with some stock for my hard work.<p>I'm now presented with a new start-up opportunity. However, unlike in the past, the options offer is a million+ shares at $.05, meaning I'd have to write an exercise check to the company for $50k+, which I deem "unaffordable." I understand that I'd only exercise if the company was worth something, but if I have to leave at, say year 5 and the company hasn't sold yet but is moderately successful, I'd have to, within 90 days, come up with $50k, or a buyer for at least some portion of my shares to offset the $50k check.<p>To me, the astronomically high number of shares is a huge red flag because it's so unlike any other scenario I've experienced. It seems like it's way worse than the usual 4-year-vesting golden handcuffs. If it takes 8 years to get to an exit, I'd pretty much have to be there until that time if I didn't want to pay $50k out of pocket and also didn't want to walk away with nothing after several years of back-breaking work.<p>Has anyone experienced a very-high-number-of-shares options scenario like mine before? Is it indeed a red flag? Is the founder using the overall high number of outstanding shares (one hundred million) to take the typical "golden handcuffs" to the next level?

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