The offer and the company
Amounts accept k, M and B (20M = 20,000,000). Preferences are treated as paid first. One flat tax rate is applied to the gain at exit; tax at exercise and AMT are not modelled.
Fill in the offer, then click Calculate.
Result
By exit scenario
| Scenario | Chance | Company sells for | Cost to exercise | You keep, after tax |
|---|
How it is calculated
Your stake is options divided by fully diluted shares, reduced by each future round's dilution. Proceeds to common holders are the sale price less the liquidation preferences. Each vested option is worth its share of that amount minus the strike price, or zero if that is negative. Tax is one flat rate on the gain. The scenarios are weighted by the chances you enter; the remainder is the chance of no payout. The break-even exit solves the same formula backwards.
Not modelled: participating or multiple-times preferences, conversion of preferred stock, option pool top-ups, tax at exercise, alternative minimum tax, state tax, early-exercise and 83(b) choices, acceleration on a sale, and any estimate of a company's odds. Unverified: checked by hand calculation and unit tests only. Have a professional review a real offer.
Common questions
What are my startup stock options actually worth?
Usually far less than the headline. Your share of the company is diluted by every future funding round, investors with liquidation preferences are paid first, only vested options count, you pay the strike price to exercise, and tax is due on the gain. Most startups also never reach an exit that pays common holders anything. This tool applies each of those steps to the numbers you enter.
What should I ask a startup before accepting options?
How many fully diluted shares are outstanding, the strike price, the total raised and whether the preferred stock is participating, the vesting schedule and cliff, how long you have to exercise after leaving, and whether early exercise is offered. The share count matters more than the number of options: 40,000 options is meaningless without the total.
What is a liquidation preference?
Investors in preferred stock are usually paid back before common shareholders, and employees hold common. If a company that raised $60 million sells for $50 million, common holders may receive nothing. Enter the total preferences ahead of common and the tool subtracts them first. It treats preferences as always taken, which slightly understates very large exits.
How does dilution affect my options?
Each new round issues shares, so your percentage shrinks. Two rounds that each dilute 15% leave you with about 72% of your current percentage. Enter the number of expected rounds and the dilution per round.
Why does the tool ask for the chance of each exit?
Because the honest answer to what the options are worth is a spread of outcomes, not one number. You choose a small, a good and a big exit and how likely each is; whatever probability is left is the chance of a wipe-out. The tool does not estimate these odds and none are built in.
What does it cost to exercise?
The strike price times the vested options, paid in cash, often within 90 days of leaving. This tool shows that cash figure. It does not model tax due at exercise, alternative minimum tax on incentive stock options, or state tax; it applies one flat rate to the gain at exit.
Is my offer information uploaded anywhere?
No. Everything you type stays in this browser tab. There are no accounts, cookies or analytics vendors.