Ask HN: How common is it to withhold info about dilution?

3 pointsposted 19 hours ago
by nocaptable

Item id: 46569858

3 Comments

jerf

19 hours ago

Fairly common from what I've seen. You're supposed to ooh and aah at the number of options they give you and not ask question about what they're actually going to be worth. This is one of the bigger reasons HN tends to advise people to treat stock options like lottery tickets rather than any sort of money in the bank. You generally have no idea what they've done to your "options" between giving them to you and you finally getting to exercise them, especially with the ever-lengthening time it takes for companies to finally go public. On the plus side, this has also driven the creation of other ways of getting options out of a company prior to an IPO.

icedchai

19 hours ago

Very common. If you do get a number of out them, it is meaningless without understanding other details, like the liquidation preferences that may be held by current investors.

bix6

19 hours ago

They can give you a few numbers without sharing the detailed cap table. Will they though? :p You could try to get around it by asking the last 409A valuation.