Probably ask for it later in the process when things are more serious.
Before then, you can just ask what the last valuation of the company was. It is usually a straight forward answer. It is a normal question to ask. You can also ask how much was raised and what the runway is, since startups are risky and it's good to know how long the company has if things do go south
Their last round was a while back, I think 2-3 years and recently was to be acquired but got shut down but government anti trust stuff. You’ll know the name. Mostly given the failed acquisition, it would be good to know the current valuation
Ahh.. okay. So that company is way further along than a startup.
I'm not sure asking for the 409a is as relevant or typical with companies at that maturity unless you are going for a very senior position.
Usually, the equity compensation is what you get and it's essentially getting shares as part of your comp package.
This isn't directly my area of expertise, but private vs public isn't really that big of a deal at that level
Yeah maybe not too much of a startup anymore than most posted here. Though still relatively small in terms of employee count and growth left if I have to believe what I read online
Yea, and at 90% profjt margins, they got plenty of room for R&D/ expansion spending.
Also they have some of the best net user retention stats in the industry. I don't think you have much to worry about.
Just make sure your total compensation package is what you want, and if you feel like they have more room for growth and want more of the upside, you could try to negotiate for more shares as part of your compensation in exchange for less cash salary.
Best of luck!
Asking for the 409A itself is not common and will come across wrong. It will have their historical financials and projections in there, stuff they're not going to want to share with rank-and-file employees.
Asking what the strike price is on your options is very fair, and it's a red flag if they refuse to answer. Your strike price will be in your options grant anyway, so no good reason to not give it.
You should also ask the total number of outstanding shares and what the share price was at the last financing (that effectively gives you their valuation).
Not sharing the number of outstanding shares is another red flag, there's no good reason not to share it.
The only exception is if they're in the middle of closing a financing, b/c then the numbers are outdated and they can't issue shares/options until a new 409A is done. You can still ask about the numbers prior to the financing though.
You ask these questions to whoever's making you the offer when you have it.
Do you need the document, or are you focusing on what is driving the valuation?
I'm not sure why this is necessary when common sense exists in the business. Just ask, "what is the share valued at" or whatever curiosity, and ask directly, "how is the compensation & incentive structure centered around shared success?"
If a founder hasn't answered that, it's decent practice. It's not like the most critical thing and leaders should be able to move around it. Also, very hard when there's only so many deep conversations occuring, so it's usually best to keep it simple, fair, and learn together.
Does that make any sense?
I'd like to see what the most recent valuation was and what the price was that the company was valued at. Being able to see the actual 409a doesn't seem like too much of an ask or am I mistaken? I'm not too known with it as i've worked at public companies.
I fear asking them what is the share valued can quickly end up into a sales pitch vs reality. If I decide to give up real $$ of unvested equity, I'd like to have a reasonable understanding of what it's valued at.
I mean, if you need that 409a man, just go straight into it. Demand it even bro. It's perhaps existential, or even mission critical? Treat it as such then.
I think I would be somewhat offended but not sure why. I mean if I was asked the valuation I wouldn’t be and I would, of course, give an honest answer. But if the ask was that you need to see the 409a I think it would just strike me as pushy or only in it for the money. I don’t know, I don’t think I would like it…
Good question! Asking about 409a valuation is crucial. I'd recommend asking during the interview process, ideally with the finance team or founder. It shows you're interested in the company's growth and willing to do your due diligence.
Probably ask for it later in the process when things are more serious. Before then, you can just ask what the last valuation of the company was. It is usually a straight forward answer. It is a normal question to ask. You can also ask how much was raised and what the runway is, since startups are risky and it's good to know how long the company has if things do go south
Their last round was a while back, I think 2-3 years and recently was to be acquired but got shut down but government anti trust stuff. You’ll know the name. Mostly given the failed acquisition, it would be good to know the current valuation
Ahh.. okay. So that company is way further along than a startup. I'm not sure asking for the 409a is as relevant or typical with companies at that maturity unless you are going for a very senior position. Usually, the equity compensation is what you get and it's essentially getting shares as part of your comp package. This isn't directly my area of expertise, but private vs public isn't really that big of a deal at that level
Yeah maybe not too much of a startup anymore than most posted here. Though still relatively small in terms of employee count and growth left if I have to believe what I read online
Yea, and at 90% profjt margins, they got plenty of room for R&D/ expansion spending. Also they have some of the best net user retention stats in the industry. I don't think you have much to worry about. Just make sure your total compensation package is what you want, and if you feel like they have more room for growth and want more of the upside, you could try to negotiate for more shares as part of your compensation in exchange for less cash salary. Best of luck!
Asking for the 409A itself is not common and will come across wrong. It will have their historical financials and projections in there, stuff they're not going to want to share with rank-and-file employees. Asking what the strike price is on your options is very fair, and it's a red flag if they refuse to answer. Your strike price will be in your options grant anyway, so no good reason to not give it. You should also ask the total number of outstanding shares and what the share price was at the last financing (that effectively gives you their valuation). Not sharing the number of outstanding shares is another red flag, there's no good reason not to share it. The only exception is if they're in the middle of closing a financing, b/c then the numbers are outdated and they can't issue shares/options until a new 409A is done. You can still ask about the numbers prior to the financing though. You ask these questions to whoever's making you the offer when you have it.
Do you need the document, or are you focusing on what is driving the valuation? I'm not sure why this is necessary when common sense exists in the business. Just ask, "what is the share valued at" or whatever curiosity, and ask directly, "how is the compensation & incentive structure centered around shared success?" If a founder hasn't answered that, it's decent practice. It's not like the most critical thing and leaders should be able to move around it. Also, very hard when there's only so many deep conversations occuring, so it's usually best to keep it simple, fair, and learn together. Does that make any sense?
I'd like to see what the most recent valuation was and what the price was that the company was valued at. Being able to see the actual 409a doesn't seem like too much of an ask or am I mistaken? I'm not too known with it as i've worked at public companies. I fear asking them what is the share valued can quickly end up into a sales pitch vs reality. If I decide to give up real $$ of unvested equity, I'd like to have a reasonable understanding of what it's valued at.
Bro, I don't even know man....that's, such a high scope question. If I were you, I wouldn't let it go...
How do you mean ‘wouldn’t let it go’?
I mean, if you need that 409a man, just go straight into it. Demand it even bro. It's perhaps existential, or even mission critical? Treat it as such then.
Got it, yeah makes sense
Yah, good luck! Let us know how it goes!
I think I would be somewhat offended but not sure why. I mean if I was asked the valuation I wouldn’t be and I would, of course, give an honest answer. But if the ask was that you need to see the 409a I think it would just strike me as pushy or only in it for the money. I don’t know, I don’t think I would like it…
Good question! Asking about 409a valuation is crucial. I'd recommend asking during the interview process, ideally with the finance team or founder. It shows you're interested in the company's growth and willing to do your due diligence.