Congrats on the equity dude.

Hard to give you advice as there's a ton of extra details that can change how impactful your equity is.

What's the vesting period? Typically there will be a cliff which you have to reach i.e a year and then after that they vest monthly over 4 years.

Are they subject to dilution?

Assuming this is $75k worth of shares, so what is the price per share as that will change how much you'd receive etc?

Are you getting a reduced strike price below the value of the share?

What's the total share pool?

What class of shares are these?

Bunch of other things, but without some of the above detail hard to say.

El_Duderino

Executive

Senior AE

All things I need to look into- thanks for the heads up on shit to ask. Lol

poweredbycaffeine

WR Lieutenant

☕️

If the acquiring company isn't a bunch of assholes, they'll pay you a price per share on the shares that have been allocated to you. This is known as a liquidation event, and only comes around when you are acquired or hit an IPO.

For example, if you have 75,000 shares, and the acquisition price is $1.50 per share, you'll make $112,500.

This is a very simplified version of what *could* happen...however, a 2 year timeline for acquisition provides lots of things to happen. You could leave in 14 months and only walk away with 37.5k shares, that is if you exercise them at the current stock exercise price.

Diablo

Politicker

Sr. AE

Generally, the acquiring company can cash you out for your stocks (and you pay tax on capital gain) OR they might grant your their stock.

There are many types, not sure what category you fall into but go through this page that can answer most of the things you're looking out for: https://www.google.com/amp/s/darrowwealthmanagement.com/blog/asset-management-employee-stock-options-after-acquisition/amp/

braintank

Politicker

Enterprise Account Executive

Explanation and free calculator here: https://carta.com/blog/value-equity-offer-startup-equity-calculator/

payton_pritchard

Executive

RSM

Equity is great to have but essentially worthless until there is some sort of liquidity event, and statistically the majority of options end up worthless -- I don't mean this to be negative, positive outcomes can be *very* positive but make sure you aren't sacrificing too much ote for to get the equity.

As far as what they'll be worth, it's very hard to say without more info -- strike price, shares outstanding, preference, vest schedule etc. Preference especially has hurt me on outcomes in the past, investors get paid back before employees get any returns.

Justatitle

Big Shot

Account Executive

There’s 3 main ways this breaks down

1.) acquiring company buys you and vests your shares immediately and you get paid immediately

2.) acquiring company does a stock swap which usually isn’t a 1:1 swap, it depends on their stock price and then you have a 1 year lockout period usually.

3.) you have to wait until your current company goes public and then you wait again until you can sell your shares.

there’s some other things that can happen but usually it’s the above. Also equity is nice and all but I’ve never let it be the main driver. Reason being is there’s so much that can go wrong and those options could be worth nothing if there’s not an acquisition or IPO.

Upper_Class_SaaS

Politicker

Account Executive

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El_Duderino

Equity Options in Startup

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