> You receive a job offer from a startup currently valued at $10m, with a strike price of $2.5m.
Isn't backdating employee stock options like this kind of sketchy/illegal? If the company is worth $10m and you accept a job offer and get an option grant, you don't get options priced as if you accepted the job offer back when the company was worth $2.5m.
Backdating to skirt FMV is not allowed, but the valuation is ordinarily based on the last funding round--for preferred stock, with some terms favorable to the investors--and what you're getting options for is common stock, with no terms.
Isn't backdating employee stock options like this kind of sketchy/illegal? If the company is worth $10m and you accept a job offer and get an option grant, you don't get options priced as if you accepted the job offer back when the company was worth $2.5m.