How startup stock options work, from the job offer to the day they pay
The strike price: what a stock option lets you buy, and for how much
You hold thousands of stock options in a startup, and you do not own one share of it. What does an option really give you, and at what price?
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1
On paper, your 50,000 options are now worth $100,000. But you do not own a single share yet. Look at a line of your offer you skipped: 20 cents. Each option lets you buy one share for 20 cents, whatever a share is worth by then. That fixed price is the strike price.
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2
On your first day, the company had an outside expert value one of its shares: 20 cents. That value became your strike price, and it never changes after that.
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