Grants are always subject to board approval, due to corporate structure of literally every startup I've ever heard of. It's a rubber-stamp process (for normal-sized grants, anyway) and employees always get the options.
Similarly, they can't specify the strike price because for legal reasons the strike price is set when the options are issued.
Nonetheless, options of this kind are worth a potentially huge amount of money. X00,000s of google shares, given to you subject to board approval and with an unknown strike price, would have been fabulously valuable.
However, perfectly legitimate questions:
How many outstanding shares of stock do you have on a fully-diluted basis? X00,000s of stock options is meaningless, only percentages matter. You should always ask this question.
What was the last 409a valuation for common stock? When did you get your last 409a valuation? This will determine the strike price your options get, assuming that their 409a valuation is less than a year old.
So actually, their answers were perfectly legitimate. $35k under market is quite a bit, though depending on the percentage of the company you were getting it might be fair.
> Grants are always subject to board approval...and employees always get the options.
My sibling comment offers a counterexample [1].
> X00,000s of stock options is meaningless, only percentages matter. You should always ask this question.
Exactly right. They weren't willing to answer this question in writing.
> Similarly, they can't specify the strike price because for legal reasons the strike price is set when the options are issued.
I believe it's legal to set the strike price at X percent of the stock price, which seems to be what you'd really need to try to valuate private company stock options anyway.
>How many outstanding shares of stock do you have on a fully-diluted basis? X00,000s of stock options is meaningless, only percentages matter. You should always ask this question.
Bingo. I have no idea why they routinely fail to give enough information to make the option grant even remotely meaningful.
Fortunately, where I work, the head of finance told me how many shares were outstanding, fully diluted, and in writing, when I asked.
Similarly, they can't specify the strike price because for legal reasons the strike price is set when the options are issued.
Nonetheless, options of this kind are worth a potentially huge amount of money. X00,000s of google shares, given to you subject to board approval and with an unknown strike price, would have been fabulously valuable.
However, perfectly legitimate questions:
How many outstanding shares of stock do you have on a fully-diluted basis? X00,000s of stock options is meaningless, only percentages matter. You should always ask this question.
What was the last 409a valuation for common stock? When did you get your last 409a valuation? This will determine the strike price your options get, assuming that their 409a valuation is less than a year old.
So actually, their answers were perfectly legitimate. $35k under market is quite a bit, though depending on the percentage of the company you were getting it might be fair.