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The CEO of Carta explains how to value an option grant from a startup.



Carta, Henry Ward
Henry Ward is the cofounder and CEO of Carta, a startup
that helps other companies manage the stock options grants
they’ve given employees.


  • Henry Ward, cofounder and CEO of Carta, says tech
    workers make a common mistake in evaluating job offers from
  • Those offers are typically heavy weighted toward stock
    options or other kinds of ownership stakes, rather than cash
  • Job candidates tend to focus too much on how much those
    grants are worth in the near term and not enough on what they
    could be

    worth in the future, he
  • Options can offer a huge payoff if a startup is
    successful — but they can also be worth nothing if its fizzles

Getting a job offer at a startup is exciting. But making sense of
the pay package startups offer can be daunting and confusing.

Big, established tech companies such as Facebook, Apple, Amazon,
and Google often have the resources to pay new hires ridiculous
sums of money. But startups usually don’t. Instead, in lieu of
high salaries, they typically offer candidates equity
in the company in the form of stock options or other kinds of
ownership stakes.

Options give employees get the right to buy stock in a company at
a set price. If and as the company grows and becomes more
valuable, the value of employees’ options can increase.

Understanding how much an offer of options or other equity is
worth starts with asking the right questions, said Henry Ward,
cofounder and CEO of Carta, a
$516 million startup whose service helps companies manage their
equity awards to employees. …


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