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  • 09-07-2011 1:29pm
    #1
    OwenM
    Registered Users, Registered Users 2 Posts: 859 ✭✭✭


    In a tech startup, significant funding in place and substantial IP already built, I am soon to be given share options. What kind of questions should I be asking about them.

    I am aware that it is a private limited company and that unless the company is bought out then exercising them will be next to impossible.

    Am concerned about subsequent funding diluting the potential value, anything I can do to limit this?

    I have worked for a MNC and had options before but these were in a publicly traded company so am familiar with vesting, taxation etc.


Comments

  • #2
    hobochris
    Registered Users, Registered Users 2 Posts: 2,164 ✭✭✭hobochris


    Make sure you have all in writing, I've known of a few companies that have offered shares verbally to developers and not made good their offer.


  • #3
    CuLT
    Subscribers Posts: 9,716 ✭✭✭CuLT


    Worth asking the guys in the Entrepreneurial & Business Management forum.


  • #4
    fergalr
    Registered Users, Registered Users 2 Posts: 1,922 ✭✭✭fergalr


    Don't consider them as a particularly large part of your remuneration.

    Unless you are getting options on substantial equity, the expected value of the options are unlikely to make it worth your while trying to lock down the legalities to the extent you'd need to, to ensure you get your due.

    General advice would be to make sure you are happy with your salary take, see any income from options as a bonus, hope the people running the scheme are decent, and not worry too much about it -- unless you think the options are very valuable.


  • #5
    CreepingDeath
    Closed Accounts Posts: 8,015 ✭✭✭CreepingDeath


    OwenM wrote: »
    In a tech startup, significant funding in place and substantial IP already built, I am soon to be given share options. What kind of questions should I be asking about them.

    Ask when the options vest.
    Eg. you might get 4000 share options that vest at 1000 a year, so it takes you 4 years to get them all.


  • #6
    amen
    Registered Users, Registered Users 2 Posts: 2,781 ✭✭✭amen


    Ask what happens if the company is sold or some shares or sold.

    You want to make sure all shares are at least sold in proportion i.e. if 70% of the company is sold then 70% of everyones shares are sold. This ensures that if one person owns 70% of the company he can't just sell his shares and leave everyone else high and dry.

    When happens if you die. Do the shares to your estate or do the company have exclusive rights over them?

    what happens if you get divorced or another shareholder gets divorced?

    If you are minority shareholder though it is hard to enforce your rights.


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