Re:Ask HN: Exercise Price For Options At A Startup
by mchannon on Wednesday August 22, 2012 @06:05PM
(#4419865)
Since you've mentioned the founder is the source of the $60 valuation, you need to look at the fundamentals of the company to calculate what those options are really worth. (who's the other 40%?)
Figure how many $M in earnings the business has now, 1 year, 5 years, and then multiply that by a P/E ratio, of, say, 20. If you're nowhere near $60M then the founder is not being honest with you (and unfortunately, probably not honest with himself either).
Figure how many $M in earnings the business has now, 1 year, 5 years, and then multiply that by a P/E ratio, of, say, 20. If you're nowhere near $60M then the founder is not being honest with you (and unfortunately, probably not honest with himself either).