http://www.startupcompanylawyer.com/2009/01/01/how-do-you-set-the-exercise-price-of-stock-options-to-avoid-section-409a-issues/ Venture capital, seed financings, convertible note bridge debt, M&A, option vesting and other matters explained for founders and entrepreneurs Fri, 19 Mar 2010 08:24:58 +0000 http://wordpress.org/?v=2.9 hourly 1 http://www.startupcompanylawyer.com/2009/01/01/how-do-you-set-the-exercise-price-of-stock-options-to-avoid-section-409a-issues/comment-page-1/#comment-3003 Yokum Fri, 17 Apr 2009 10:50:18 +0000 http://www.startupcompanylawyer.com/?p=348#comment-3003 @Geo - Tough call. Options need to be granted at FMV. If a company is able to raise $800K of financing, it probably means that FMV of the common is greater than nominal. BTW, $0.01 is a meaningless number without more context. @Geo – Tough call. Options need to be granted at FMV. If a company is able to raise $800K of financing, it probably means that FMV of the common is greater than nominal. BTW, $0.01 is a meaningless number without more context.

]]> http://www.startupcompanylawyer.com/2009/01/01/how-do-you-set-the-exercise-price-of-stock-options-to-avoid-section-409a-issues/comment-page-1/#comment-2475 Yokum Fri, 17 Apr 2009 04:50:18 +0000 http://www.startupcompanylawyer.com/?p=348#comment-2475 @Geo - Tough call. Options need to be granted at FMV. If a company is able to raise $800K of financing, it probably means that FMV of the common is greater than nominal. BTW, $0.01 is a meaningless number without more context. @Geo – Tough call. Options need to be granted at FMV. If a company is able to raise $800K of financing, it probably means that FMV of the common is greater than nominal. BTW, $0.01 is a meaningless number without more context.

]]> http://www.startupcompanylawyer.com/2009/01/01/how-do-you-set-the-exercise-price-of-stock-options-to-avoid-section-409a-issues/comment-page-1/#comment-2465 Geo Wed, 15 Apr 2009 23:14:19 +0000 http://www.startupcompanylawyer.com/?p=348#comment-2465 If a startup company is pre-revenue and pre-VC financing, but has a convertible note seed financing of $800K, can it offer options at an exercise price equal to the common stock par value of $0.01 to staff joining before the VC financing. I get it that after the VC round it will have to equal 25%-30% of the Series A VC preferred price, based on what's above, but what about during the angel-seed-convertible note stage? If a startup company is pre-revenue and pre-VC financing, but has a convertible note seed financing of $800K, can it offer options at an exercise price equal to the common stock par value of $0.01 to staff joining before the VC financing. I get it that after the VC round it will have to equal 25%-30% of the Series A VC preferred price, based on what's above, but what about during the angel-seed-convertible note stage?

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