how to know strike price from startup just joined if not in written contract?
i just started wkg, but noticed that the strike price is not indicated, ex: $.05 or $.20/share, etc.while i have certain #of shares. what’s the best way to know by asking, what are some key questions i can asked so i’m not tricked into a false price? from research, employees get 25% discount of what investors’ valued shares – is that normal, or case dependent? is this normal not to include this info in contract or depnds on board of directors’ mtg then the price is decided? but isn’t that already done before the job’s offered? thanks!
At startups this usually isn’t an issue. Many places won’t let you purchase your options and carry stock until they are public. Additionally, the total number of shares outstanding -and their value- will change dramatically before the IPO if the company looks for additional financing or uses its equity. Early on, they may not have had a reason to set a strike price yet.
In general, what you want to know is what % of the company you own. You would need:
- # of shares optioned to you
- # of shares the company has total
- % of the company that was given to investors in the last round of financing
- Amount of money that was paid by these investors.
From this you can figure the valuation of the firm, and a rough idea of your % of ownership if it went public immediately. You can also figure the cost/share that those investors paid.
you can check stock, and options prices on most online trading sites for free, most prices are delayed 15min. unless you trade with them. also your co. financial officer may be able to assist you with any questions you have about purchasing your co. stock.