Issuing Stock Options: Ten Tips For Entrepreneurs

Fred Wilson, a New York City-based VC, wrote an interesting post a few days ago entitled “Valuation and Option Pool,” in which he discusses the “contentious” issue of the inclusion of an option pool in the pre-money valuation of a startup.  Based on the comments to such post and a google search of related posts, it occurred to me that there is a lot of misinformation on the Web with respect to stock options – particularly in connection with startups.  Accordingly, the purpose of this post is (i) to clarify certain issues with respect to the issuance of stock options; and (ii) to provide ten tips for entrepreneurs who are contemplating issuing stock options in connection with their venture.  (more…)

Tags: exercise price, key employees, option pool, options, restricted stock, Rule 701, securities laws, stock option plan, stock options, vesting
Posted in Entrepreneurship, Startup Issues | 2 Comments »