Stock Markets Exposed
How stock options work?
I would like to ask you about stock options in Startup Company. Board grants to employee A let say xx,xxx stock options and total pool today is x,xxx,xxx, there are vesting rules 48 peaces one peace every month etc. Is employee owner of x% presents of company and what happened if somebody invests money and is it possible that on IPO somehow they say there are xx,xxx,xxx shares and employee A still have worthless xx,xxx shares? OK, yes stock options gave to person A right to purchase let say xx,xxx shares for xx.00 dollars. That is right.
Public Comments
- If you have stock options, you have the right to purchase stock at a set price. The price you'll pay is set by the Board of Directors (usually). If the company is pre-IPO, the price may be quite low. The hope is that when the company goes public, your stock will be worth more than the option price. The vesting schedule sets forth the time and amount of stock you can purchase.
