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Previous episode Why you cannot sell your shares in a private company, until an exit

How startup stock options work, from the job offer to the day they pay

Liquidation preference: why investors are paid first when a startup is sold

A buyer offers millions of dollars for your startup. You own a small part of it, so you do the sum and smile. Why can the real number for you be zero?

  1. 1 In your fifth year, the app grows more slowly, and money runs short. A buyer offers $15 million for the whole company.MivaRonothe buyer$15 millionfor all of it.

    In your fifth year, the app grows more slowly, and money runs short. A buyer offers $15 million for the whole company.

  2. 2 You count fast. Your 50,000 options, all vested now, are 0.25% of the company, and 0.25% of $15 million is $37,500. Miva shakes her head.you0.25% of$15 million= $37,500example numbers

    You count fast. Your 50,000 options, all vested now, are 0.25% of the company, and 0.25% of $15 million is $37,500. Miva shakes her head.

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Next episode When a startup is sold or shuts down: what your stock options pay in the end

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