

Ask HN: Formula to calculate how much is your equity worth during an exit? - tzz

What is a generic formula to calculate how much is your stock option worth when the company is acquired?<p>How much is the equity worth on the following scenarios?<p>Scenario #1 (everyone is fully vested)<p><pre><code>  - Your equity is 1% with $0.10&#x2F;share strike price (common stock)
  - Investors own 20% with $20M invested (preferred stock)
  - Founders own 70% (founder stock)
  - Employee own 9% (common stock)
  - The company is acquired for $30M.
</code></pre>
Scenario #2 (everyone is fully vested)<p><pre><code>  - Everything is same as above except the company is acuired for $50M
</code></pre>
Scenario #3 (everyone is fully vested)<p><pre><code>  - Everything is same as above except the company is acuired for $100M
</code></pre>
Let me know if I am missing other data.
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chrisbennet
Does that 1% account for dilution? In other words, have all the investors
already invested? For example,if you get 1% for joining, pre-investment, it
will be diluted when more stock is added to the pool to sell to the investors.

There are also "liquidation preferences" to take into account.
[http://www.businessinsider.com/how-liquidation-
preferences-w...](http://www.businessinsider.com/how-liquidation-preferences-
work-2014-3)

