One of the most common questions that employees who get job offers need to deal with is how do they know to estimate the value of the stock options they got offered, and how to calculate the potential stock value over time. This is a complicated topic and is hard to estimate and predict mathematically, but this calculator models the basic idea around how employees should think about their stock options and what type of return you should assume your stock will have over time.
The basic concept behind this calculator is that the only way to assess how much stock will be worth is by guessing the valuation of the company and understanding how over time the start-up will be diluted by fundraising to get to that valuation.
Note that this calculator ignores the strike price of options. You will first have to deduct the cost of acquiring the stock. The actual value of your stock is calculated by the following formula:
Stock Value = Options x (Stock Price - Strike Price)
First, fill in the company details. Then enter your stock offer (either in value or percentage) and the calculator will calculate how much it estimates your stock will be worth when the company will reach the expected valuation.
Number of raises needed:
2.56
Dilution ratio for all rounds:
0.48
Potential stock value:
$718,023