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How can I evaluate the value of employee stocks of a series-A startup company?

The first thing to consider with valuing your employee stock is whether you are fully vested. How vested you are will play a big part in what your stocks are worth. For instance, if you opted to leave the startup before you were fully vested, you would likely lose your stock options. For the sake of this discussion, let’s say that you’re fully vested.

Like previously mentioned by others, determining worth with a Series-A startup is different. That’s because Series-A is an early round of funding. So, I’m going to presume that this startup is extremely young. The financiers may be holding preferred stock. During this round of financing, the goal is to make sure that the start-up can cover salaries, necessary market research, and tweaks to products or services to get them to the market. Series-A remains until the start-up is bringing in revenue. This is the riskiest time for the business.

So, what does that mean for you? It means that during this timeframe, your employee stocks may not be worth anything (generally speaking) between the fact that the business is so young and you are likely not fully vested.

Past that, you would also want to consider the price of buying shares and what you could make on the open market by selling them. Yet, as I said, though, the fact that you would need to be vested and the company would really need to be out of Series-A must be considered.

It might be worth it for you to talk with an expert. LawTrades has helped thousands of people with startup-related questions. Our entrepreneurial-focused attorneys are well experienced when it comes to figuring out equity issues. Feel free to visit us for a complimentary consultation. Hope this helped!