Typically includes things like total outstanding shares, conversion price of the various preferred rounds, liquidation preference for the preferred shares, etc. The delta between the most recent preferred round and the 409a is the best approximation of the actual value of the equity at the time of the grant.
Assuming your interviewers are potential future teammates, ask them questions about work. Ask your recruiter or future manager benefits and comp questions. At most companies >10 people, your recruiter will have a packet with all the answers to equity questions.
Something I've noticed more recently is the standard equity info they send everyone is both light on details and heavy on "here's how much you stand to make if we exit at X". I can't blame them for selling it, but I shouldn't have to ask for shares outstanding, latest 409a or other simple numbers.
I've also been screwed by joining just after a big raise and having my strike price end up much higher than I was told when interviewing.
Yes you can, and should.
I don’t try to sell candidates on the possible stock upside because I don’t want to provide investment or tax advice. I’m not licensed to do so; I have a company to run. It’s up to them to decide if they want to early exercise or if they think it’s fair not.
I do the opposite: tell the candidate the number (that’s what the board approves) and what FD percentage it represents. If they ask if it’s a reasonable amount I explain how much we give for a given position plus how that is modulated by company stage. I always allow early exercise.
In 30 years of startups nobody has ever complained.
There's a large share of capable engineers who are still wide-eyed over startup equity. Folks I know personally and greatly respect. Startups have had no trouble duping engineers into lower compensation while delivering serviceable results, and will continue to have no problem.
the funny thing is that the vast majority of people don't understand how money comes into being, how banks work, etc. And yet, they still just accept cash and use it.
So may be it isn't irrational to have accepted bitcoins in a job as payment, without understanding it. The reason most people don't accept bitcoin (or crypto in general) is that they feel the value is too volatile and might change too much for them to make good financial plans with it.
Random googling never gives me confidence I'm getting the right information when it comes to money, nutrition, and health.
Sign up for Matt Levine's newsletter. He's perhaps starting to be a little overexposed on HN, but he's informative and humorous, and his newsletter is a good way to get a little exposure to finance every day.
It's not not startup-equity specific, but check out Bogleheads for generic investing advice.
TLDR Stock Options: https://equity.ltse.com/calculators/tldr-stock-options
On the other hand, I always insist on talking to the CEO or the highest ranking exec you can during the interview process. It is absolutely in your best interest to hear the company's vision and path to success directly from the source. Again, this person will clam up when discussing financial specifics, but you should still expect them to make you feel secure about the company's potential.
The present value of cash flows is so much higher than the future value of some illiquid, highly speculative startup equity with way more restrictions than regular public stock equity.
10 years later I'm up 2 million on the house, lost 20,000-40,000 grand on the startup options. I wasn't forced to move in order to full vest and be tied to a dead product for 2 years while they figured out how to move anything of value into their applications.
There are a lot of ways to earn a million and taking more cash and investing yourself could yield more.
Are you tapping into the value of your home with a mortgage? Otherwise, it seems like that's even less liquid than private stock (unless you move out.)
I did tap into the value recently. It's more liquid compared to most private stock but nowhere as liquid as public stock.
The one advantage is all profits on the house are tax free.
Yes, mine are down about 20% from the time I was awarded them. But at least I can sell them and not hope for an exit event.
I don’t thing employees of FAAMG (not a typo, Netflix was never “Big”Tech with a 1 trillion dollar* market cap) have to worry about their stock going to $0
Fewer than 10 employees... those interviewing likely know the answers and will share.
Between 10-50 employees... those interviewing may still know the answers and may still be open to sharing them.
Above 50 employees... it is increasingly likely that this information isn't known by more than a few people (those involved in the fundraising, accounts, senior leadership), and that your interviewers do not know it - if they know it at one point in time it's out of date quickly (next raise). It quick becomes something that only a very few people know and the information isn't useful/constructive to those focusing on execution (those who will be interviewing you).
The questions are good... but if you don't get answers and would choose not to take the roles on that basis, then you might want to chat to a lot of people who have been early stage and done well - because very few got answers to those questions.