Driving Business Advantage
FOLEY
HOAG LLP
Driving Business Advantage
Price
Pre-Money Valuation
= Pre-Money Valuation
Pre-Money Shares Outstanding
"Option Pool" is critical issue
- Options are rights to buy shares of common stock in the future at a set
price. Granted to employees, consultants, advisors, board members.
- The "pool" is the number of shares of common stock that you have
reserved for options outstanding and options to be granted in the future.
– Do we have a sufficient number of shares "reserved" to compensate
and motivate existing and future employees?
- The higher this number, the lower the share price for the investors, and
thus the higher the number of shares issued for the same amount of
money invested.
- Bigger isn't always better.
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