Re:TLDR Stock Options
by mcv on Tuesday March 05, 2019 @11:46AM
(#19311808)
A conservative estimate of the expected value of the options in a startup that is not successful yet, is $0.
So assuming the options are worthless is not all that unreasonable. Options are bonus, not part of the real compensation. Unless the company is already successful or your share in the company is large enough that it really is worth the risk.
But if in the most optimistic scenario your options end up being worth $1 million, but it's going to be years before they're worth that much, the chance they're going to end up worth that much is small, and in the mean time you're severely underpaid, then it's probably not such a good idea.
So assuming the options are worthless is not all that unreasonable. Options are bonus, not part of the real compensation. Unless the company is already successful or your share in the company is large enough that it really is worth the risk.
But if in the most optimistic scenario your options end up being worth $1 million, but it's going to be years before they're worth that much, the chance they're going to end up worth that much is small, and in the mean time you're severely underpaid, then it's probably not such a good idea.