Strike price too high?
Just got an offer from a late stage startup. They're already valued at over $4B. My offer strike price is so high that it would cost me millions of dollars to exercise my options. How is this / is my equity basically worthless? I don't understand how I could possibly exercise my shares without totally bankrupting myself or taking out a loan. Anyone come across this
Exercise and sell immediately, you don’t need cash to front, I don’t think.
Only works if the company is liquid/tradeable on secondary markets. If the company is only offering 90 days to sell on exit, then you’re fucked. You also have to pay taxes on FMV - strike price on exercise.
Find a bank willing to do a loan where you contractually liquidate and pay back + fee
I did daytrade options full time for 4 years so I know how options work. Stock options are only worth it IMO if and only if share price is higher than strike price. So unless there are very specific documentation of how many "shares outstanding" there are, the strike price information is worthless. Ask chat gpt to explain what i mean (I'm not joking)
They're not asking for a definition of what options are lmao They're asking if it's even worth persuing if they'll not be able to exercise due to high cost
the question was so basic that i thought i'd share it. RSU >>> Stock options
companies usually hire an investment firm which would provide the 'bridge' needed, so you dont actually have to have the cash. it all should take a few days to sell your options. good luck
normal. you exercise via same day sale
So you were offered the right to buy shares at a certain price? And you feel the stock is not valued at that price and won’t be any time in the near future? .. aren’t the strike prices usually reflective of the current value from the date of hire?
Even if the stock was worth more than my strike, it would be impossible for me to realize these gains because I'd have to front millions of dollars in cash to buy them
You can always sell the options? Or I guess any broker will lend you the money as long as you sell your stocks for a gain. If the stock is below your strike price it is worth 0$ (unless someone would buy you options)