Question about stock options at U.S. startups

Hi out of curiousity, I am wondering if anyone knows how many stock options do U.S. startups generally offer?

Say the company is U.S. based, and I was offered a position in their TW office. They have a total of around 60~70 people at the time of my hiring, with half in the U.S. and half in TW. The company is in the IT biz, and they have a good product and they are well financed.

I know that for large US companies, they generally offer around 800 to 1000 options vesting over 4 years right? I’m not sure about startups tho…would it be 5000? 10,000? What if they really wanted you? Can someone give me a ballpark figure?

Also, say if the startup gets bought by a large public company, would those options automatically turn into stocks (cash) for that large company?

4 year vesting with a 1 year cliff (you get zero if you don’t last a year) is pretty standard. Accelerated vesting (you don’t have to serve the last year or two, you vest the remainder immediately) often happens in a merger, but no guarantee. Or it might happen for the executives but not the employees. Or the buyout might be part or all acquirer’s stock. And you might be asked to sign a standoff agreement not to sell it for a year. (To give the VC’s time to dump their shares first).

The real question is how many shares are authorized in their corporate charter. You get a piece of paper that says 10,000 on it. Is that pounds sterling or italian lire? Certainly, the total shares will vary as they issue additional series of stock. But its nice to get a ballpark e.g. “What percent of the company does this represent? How many shares are authorized? How many shares are in the employee pool? How many series of stock have you issued?” But if you’re too nosy, they may not want to hire a troublemaker who “knows too much”

Some companies will simply not tell you. For example a friend 2 years ago got an option for 10,000 shares. They wouldn’t tell him how many total shares there were. Don’t worry they said, our VC’s treat everyone real nice. They didn’t even tell him the basis of the options. When Symantec bought them, the terms of the deal were not disclosed. This was why they didn’t want to tell him anything; if they had, he could have determined the value of the Symantec buyout. The company was bought at a fire sale price, cash deal, accelerated vesting. Oh, the stock, well only after the deal closed, did they send everyone their check in the mail: $1.10 a share, minus the 30 cent basis, so $8000, enough to buy a 6 year old used car after 4 years of vesting. IMHO this was all done deliberately under the careful advice of their lawyers. It doesn’t matter if it was illegal to not disclose the basis of the options. They took every precaution to make sure a deal got done and the big dogs got their money out. The small fry got screwed; if you don’t like it, start your own startup.

Another example: 20mm common shares authorized. 5mm for the first round investors, 10mm for the founders, 5mm for the employee pool. A handful of key first employees got up to 100,000 shares. But generally 20,000 up to the first couple dozen, then 10,000 and on down.

The earlier employees get bigger chunks of options. But again knowing the total shares really helps. Though its not always possible. How long has the company been around? If the company gets a little long in the tooth, the options start to dry up.

Anyone know of a website or forum where people discuss all this inside information? There’s always

hm…i’m trying to figure out how much money i would’ve made if i took that job…woulda coulda shoulda…