Hello everybody! I lately joined an early-stage startup that supplied me 40,000 ISOs at a strike value of $0.25. They do not disclose the # of absolutely dilluted widespread inventory as a result of they are saying we’ll use it to calculate % of possession and it may be deceptive as the corporate grows. As an alternative, they inform us what the popular inventory value was of their final spherical: $1.75
They are saying this info is sweet sufficient to estimate our features shall the corporate develop and have a profitable liquidity occasion as a result of all most popular shares are was widespread inventory. Due to this fact the corporate says I can use the system:
Return = (preferred_stock_price x multiplier – strike_price) x num_of_isos
The place the multiplier have to be estimated by me based mostly on how a lot I believe the corporate will develop.
This system relies on the notional worth, as defined right here: https://carta.com/weblog/value-equity-offer-startup-equity-calculator/
Additionally, their incentive plan has 4 million shares authorized (not essentially issued). They stated they have been requested by VCs to make a plan for the primary 100 staff, so that they needed to approve much more inventory than was initially wanted to be issued (we’re 20 staff). Does this sound regular?
Is it cheap to estimate that if the corporate sells subsequent 12 months at 10 instances their present valuation (assume no additional dillution), I might roughly make (1.75 x 10 – 0.25) x 40,000 = $690,000 ?
I do know this isn’t precise monetary recommendation, blabla.
