[chamomeal]

What about if the valuation was super low when you received the options agreement?

For instance, if I got $5,000 worth of options when the company was “worth” 1 million, is that a safe bet to buy into?

Like surely the founder would be able to sell the company for 1 million dollars instead of crashing and burning… right?

[pjc50]

> surely the founder would be able to sell the company for 1 million dollars instead of crashing and burning

That is absolutely not guaranteed at all! It's not even guaranteed that the next funding round will be on a better basis, or not dilute you.

The pre-IPO market for companies is illiquid and bad at price discovery.

[rrr_oh_man]

> That is absolutely not guaranteed at all! It's not even guaranteed that the next funding round will be on a better basis, or not dilute you.

It's not even guaranteed that there will be a funding round at all. Raising money is extremely hard, for most companies.