Should I change jobs?

[jtodd_fl]

Originally Posted by MKSixer

3 Start-ups. Minimum 30,000 shares per.

End this now. Don't bother responding. You will only look dumber.

Not sure possible... Don't talk about negotiating options with someone whose nick is actually OptionLESS

[Verbiage]

Originally Posted by jtodd_fl

Not sure possible... Don't talk about negotiating options with someone whose nick is actually OptionLESS

[MKSixer]

Originally Posted by jtodd_fl

Not sure possible... Don't talk about negotiating options with someone whose nick is actually OptionLESS

I have the feeling that he could take it to the next level. Downward.

[OptionlessM]

Originally Posted by MKSixer

3 Start-ups. Minimum 30,000 shares per.

End this now. Don't bother responding. You will only look dumber.

# of shares is not enough information to determine a value.

This should be a very basic concept if you have been a part of startups or really any company that awards stock units.

[OptionlessM]

Originally Posted by jtodd_fl

Not sure possible... Don't talk about negotiating options with someone whose nick is actually OptionLESS

Is that right?

Would you mind letting me know the value of these 1000 shares? Obviously you know the number of shares that have been issued and the valuation of the company

[MKSixer]

Originally Posted by OptionlessM

# of shares is not enough information to determine a value.

This should be a very basic concept if you have been a part of startups or really any company that awards stock units.

Ok. I'll try this once more.

He is reporting to a VP. You don't know his proposed level in the company which is why I asked those questions. Typically, Directors of many different stripes report to VPs.

Based on this information I KNOW that 1,000 options is a low number.

I have led and work on teams that designed compensation plans for both large corporations with hundreds of sales persons and small start-ups that don't even have sales forces but are in the process of building one. My last was designing a sales force of about 100 all making a minimum of $120K with a non-at-risk total compensation of roughly $200K and at-risk-compensation, for the hitters approaching an additional $300K. Options to start for these people were approximately 2,000.

He stated in an earlier post that he will be charged with building a division/silo/whatever under a VP. THAT should make him at least AD or D level. An appropriate number of OPTIONS for a person of that level is 20,000 +. An appropriate number of options for the sales force/workers/fisherpersons/whatever he is attempting to build is in the 1,000 to 2,000 range.


"$$ difference in about 30k + stock prior to IPO. No idea what they are in the running of making/what they are raising though. Stock price is probably not going to be that high"

[OptionlessM]

Originally Posted by MKSixer

Ok. I'll try this once more.

He is reporting to a VP. You don't know his proposed level in the company which is why I asked those questions. Typically, Directors of many different stripes report to VPs.

Based on this information I KNOW that 1,000 options is a low number.

I have led and work on teams that designed compensation plans for both large corporations with hundreds of sales persons and small start-ups that don't even have sales forces but are in the process of building one. My last was designing a sales force of about 100 all making a minimum of $120K with a non-at-risk total compensation of roughly $200K and at-risk-compensation, for the hitters approaching an additional $300K. Options to start for these people were approximately 2,000.

He stated in an earlier post that he will be charged with building a division/silo/whatever under a VP. THAT should make him at least AD or D level. An appropriate number of OPTIONS for a person of that level is 20,000 +. An appropriate number of options for the sales force/workers/fisherpersons/whatever he is attempting to build is in the 1,000 to 2,000 range.

Before you give yourself an aneurism trying to use examples of companies that may or may not have any size or value similarities to OP's, let's get back to the basics:


On what basis are you determining the value of 1000 shares of the company OP is considering joining.


Oh I see you edited it in now. "Stock price is probably not high"

Great, thanks for knocking it out of the park for us. Heh.

[jtodd_fl]

Originally Posted by OptionlessM

Is that right?

Would you mind letting me know the value of these 1000 shares? Obviously you know the number of shares that have been issued and the valuation of the company

My last post.

Rule of thumb for most startups (particularly in tech) is 10 Million shares authorized. Founders usually actually get ISSUED 50-75% of those. So, that leaves (generally) 2.5-5Million shares to go around. Based on any rational valuation (and most irrational ones) 1,000 is low for a reasonably early-phased employee. Lot's of risk, deserves commensurate reward. Given he is a direct report to a VP and also the only one in the department, fair to assume he is "early phase". We are all making assumptions here. But the advice was far from retarded.

[MKSixer]

Originally Posted by OptionlessM

Before you give yourself an aneurism trying to use examples of companies that may or may not have any size or value similarities to OP's, let's get back to the basics:


On what basis are you determining the value of 1000 shares of the company OP is considering joining.

See above in RED

[RickFLM4]

Many pre-IPO companies have low share counts, so I think it is highly dependent on shares outstanding if getting in before an IPO / share split. If you get 1,000 share / options when 100,000 shares are outstanding (1%) and the shares are split 100:1 in the IPO you end up with 100,000 after the IPO at the IPO price. No way to know what 1,000 implies value-wise without knowing more about the existing capital structure.

[MKSixer]

Originally Posted by jtodd_fl

My last post.

Rule of thumb for most startups (particularly in tech) is 10 Million shares authorized. Founders usually actually get ISSUED 50-75% of those. So, that leaves (generally) 2.5-5Million shares to go around. Based on any rational valuation (and most irrational ones) 1,000 is low for a reasonably early-phased employee. Lot's of risk, deserves commensurate reward. Given he is a direct report to a VP and also the only one in the department, fair to assume he is "early phase". We are all making assumptions here. But the advice was far from retarded.

Early Phase. Check
Reporting to VP. Check

Ask for more than 1,000. The advice.

[edcvin]

OP,

The dynamic for switching jobs,careers and industries is a tough one. I think some of the questiosns you need to consider are:

1. How much does money matter at the moment? If you have a family,mortgage,tuitions, etc. that will impact your answer. If you are single, that will allow you more room to take some risk.

2. Do you see yourself retiring with your current company? If not, you need to consider why and what you next employment opportunity should look like. If you are not going to retire there, use it for what its good for and move on (resume builder, experience, etc.)

3. Personality. Are you able to jump out of your comfort zone and go into something else? I think this is something you know better than any of us. You should probably answer that.

4. Finally, if you left your current employer today and took this new job opportunity. If it didn't work out, do you think you would be able to go back to your old company? If you think they will take you back in the event that things did not work out, that might make the decision less risky.


Good luck!

-Vin

[jtodd_fl]

Originally Posted by RickFLM4

Many pre-IPO companies have low share counts, so I think it is highly dependent on shares outstanding if getting in before an IPO / share split. If you get 1,000 share / options when 100,000 shares are outstanding (1%) and the shares are split 100:1 in the IPO you end up with 100,000 after the IPO at the IPO price. No way to know what 1,000 implies value-wise without knowing more about the existing capital structure.

Oh God... breaking my own rule, but ONLY because it is in a different line of analysis. This is reasonable, but ignores the impact of dilution. If you are even remotely early stage, it is important to gauge your grant against authorized shares, not just issued shares. The ratio of authorized to issued, at least in part, quantifies your dilution risk. The alternative is to work in preferred shares. Lots to it and we lack a lot of info. Also lots of tax implications depending on whether they are RSUs, actual shares, etc... If this is a valley startup, they are probably RSUs and knowing how the "U" relates to actual shares, both authorized and issued, is also important. Or would be if this was all that important to the OP, which he has already said it isn't. We have collectively already expended WAY more brainpower than he has on this. But it's fun-ish.

[OptionlessM]

Originally Posted by RickFLM4

Many pre-IPO companies have low share counts, so I think it is highly dependent on shares outstanding if getting in before an IPO / share split. If you get 1,000 share / options when 100,000 shares are outstanding (1%) and the shares are split 100:1 in the IPO you end up with 100,000 after the IPO at the IPO price. No way to know what 1,000 implies value-wise without knowing more about the existing capital structure.

Whoa, definitely not. Hold on.

Not only do we know exactly the value of 1000 shares, but we also know that this startup has robust corporate structure and anyone reporting to a VP is obviously a very high level employee demanding more stock.

Disregard the fact that OP's current job is shooting media, he's obviously transferring into an executive roll.

[bailyhill]

Hello
1000 shares might be good. I did a startup in the 80's and had 1000 shares along with two other founders. There were 3000 shares total. Later went IPO/NASDAQ with 95,000 shares at $6 for my share. So it was pretty good. However, later company was de-listed, then relisted, then went NY Stock exchange and shares went for $30. This all took 15 years. By then, I had liquidated most of my 95,000 shares.

So you cannot say much without knowing how many shares there are at this point. And you don't know what the IPO will do. Our IPO multiplier was neary 100 which is typical.

Went back into the private sector and worked 30 years for a great company and have a pension with medical coverage. So I worked both ends against the middle. I am 71 and have a retirement job doing what I love. I make 10% of what I did in corporate world, but its very rewarding. I am not rich, but comfortable.

Sin_Gas

[OptionlessM]

I guess MKSixer went to ask his associate director of startup finance for advice on how to respond.

[jtodd_fl]

[RickFLM4]

Originally Posted by jtodd_fl

Oh God... breaking my own rule, but ONLY because it is in a different line of analysis. This is reasonable, but ignores the impact of dilution. If you are even remotely early stage, it is important to gauge your grant against authorized shares, not just issued shares. The ratio of authorized to issued, at least in part, quantifies your dilution risk. The alternative is to work in preferred shares. Lots to it and we lack a lot of info. Also lots of tax implications depending on whether they are RSUs, actual shares, etc... If this is a valley startup, they are probably RSUs and knowing how the "U" relates to actual shares, both authorized and issued, is also important. Or would be if this was all that important to the OP, which he has already said it isn't. We have collectively already expended WAY more brainpower than he has on this. But it's fun-ish.

He is not early stage if they are truly planning to go public in the second half of this year. There is always dilution risk regardless of authorized share when a company is privately held. The board can increase authorized shares.

[FType22]

My thread, my beautiful thread! If I wasn't on mobile I'd have some emojis to drop in here.

Edit: found the emoji

[FType22]

Originally Posted by edcvin

OP,

The dynamic for switching jobs,careers and industries is a tough one. I think some of the questiosns you need to consider are:

1. How much does money matter at the moment? If you have a family,mortgage,tuitions, etc. that will impact your answer. If you are single, that will allow you more room to take some risk.

2. Do you see yourself retiring with your current company? If not, you need to consider why and what you next employment opportunity should look like. If you are not going to retire there, use it for what its good for and move on (resume builder, experience, etc.)

3. Personality. Are you able to jump out of your comfort zone and go into something else? I think this is something you know better than any of us. You should probably answer that.

4. Finally, if you left your current employer today and took this new job opportunity. If it didn't work out, do you think you would be able to go back to your old company? If you think they will take you back in the event that things did not work out, that might make the decision less risky.


Good luck!

-Vin

1. I think money always matters. I think I live a pretty good life but the money is more like a valuation of my capabilities, which are currently undervalued by my present employer.

2.i don't see myself retiring here
3. I think I need to jump in order to grow my career and in the process, myself.
4. I think it's possible they would take me back if they had budget for my head count but I have a good relationship with the people I work with here so doing freelance could be an end all fall back. That or McDonald's.

[eluded]

Are we talking unicorns? I don't think so. Love the unicorns.

[jtodd_fl]

Originally Posted by eluded

Are we talking unicorns? I don't think so. Love the unicorns.

Me too... they are delicious, especially over a nice risotto.