| > A) What percentage of the company are you getting? Usually you are getting something minuscule initially, well below any founder or board member's share. The logic is that, if there is going to be money made, the company will need lots of headcount and that headcount all needs to think they own something significant in the entity, which they don't because of vesting, dilution, new CEOs, etc. > B) What dilution is going to happen? Unknown, and depends on the performance of the management and board, if they even bother to perform later when all the money is gone (because the company is actually not profitable, shocker) and they have to suck up to someone else who wants a higher dilution so they can get a good percent of the company. Don't forget the employees will be "the problem" if the company runs out (which means RIFs or worse). Unless it's going gang busters, in which cases that minuscule amount stays the same. Oh, don't forget preferred stock. > C) When can you sell your stake in the company? Probably never, or maybe when it sells, if you are lucky. Besides, calling it a "stake" is really a fantasy given the stake's value is tied to whatever the investors thought it was worth, which in their mind is always more than any sane person would agree to spend on the company to make it their own company's problem. If the company is even slightly profitable (unlikely) then everyone would lose their minds thinking it's worth half a billion or something. Think two 20 something year old founders thinking their company is worth 1B+ and refusing to take an offer from Facebook for half that while today they are gone and it's not worth diddly. > D) How soon and in what manner does it vest Usually to the advantage of the company. Most people never vest their full amount of shares because the company doesn't sell and over 4 years (typical vest scheduling) the chances are the company will re-up its coiffures, which means dilution and besides which you can't stand working for these idiots for more than 2 and a half years, tops. |