About 2 years ago I co-founded a company. For various reasons, earlier this year, my co-founder and I parted ways and came to an agreement that I would take a partial cash buyout and a percentage of the company as stock options.
According to our agreement, I was granted 166,667 stock options (3%) at a strike price of $0.089/share. The company at that date was valued at roughly $2,000,000. The board granted me a 10 year exercise window.
Fast forward to today. The company continues to grow around 20% month over month and just raised a nice Series A, with a post-money around $40m.
Did I screw up by not exercising the options earlier this year? Am I making the right choice by sitting on these? What should I do in this scenario? I honestly have no idea what the smart move here is. I have just enough liquid cash to purchase the options now, but my understanding is that I'd be taxed on the current value, which I guess would be somewhere around $1m, meaning I'd owe the government hundreds of thousands of dollars right?
Any advice on what I should do is much appreciated!
According to our agreement, I was granted 166,667 stock options (3%) at a strike price of $0.089/share. The company at that date was valued at roughly $2,000,000. The board granted me a 10 year exercise window.
Fast forward to today. The company continues to grow around 20% month over month and just raised a nice Series A, with a post-money around $40m.
Did I screw up by not exercising the options earlier this year? Am I making the right choice by sitting on these? What should I do in this scenario? I honestly have no idea what the smart move here is. I have just enough liquid cash to purchase the options now, but my understanding is that I'd be taxed on the current value, which I guess would be somewhere around $1m, meaning I'd owe the government hundreds of thousands of dollars right?
Any advice on what I should do is much appreciated!