ESOP Model

Comments (10)

• Alexander, do you have a legal template for this? Lawyers are expensive and it would be helpful to get a template that a lawyer can tune?

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  • Justin – Since we are talking legal ownership, you would want to account for this in a cap table. I have one that I’ll try get done. This is for having a solid overview and for planning purposes, but I wouldn’t use it as a legal document.

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• HI Justin, very nice and comprehensive model! Saved me weeks thank a lot!
  Have a question: We closed a Series A Prefered at a valuation of $47M, share price $56. A couple month later we did a 409a and it come in at a equity value of common of $15M and a shareprice of common of $11. Which should I use? Should I exclude the preferred shares from the shares amount? What shoudl I input in Assumptions D114

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  • Hi Matias –
    Justin asked a question too…

    Thanks for the feedback 😉

    You did a raise and the valuation of the PREFERENCE shares was set at a price of $56.

    If you did a 409A valuation for the COMMON with the goal of setting a strike price for options, which requires the FMV of a price per share of common stock, then the price for the common shares is $11.

    Institutional fundraising are done through a different class of stock (PREFERENCE) with better rights.

    Your 409A valuation firm basically said there is a difference between the two types of classes of share to justify a lower valuation for the common (and hence the strike price of the options) than what the investors paid for the preferred.

    The one you care about for the strike price for your staff is therefore $11.

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• Hello.
  I am interested in writing guest post for your blog. Are you currently accepting
  guest post.
  Regard’s Angela. For a guest post.

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  • Alma- I haven’t allowed any guest post to date. I only will post high-value content for startups and investors and not some rubbish for backlink purposes.
    Alexander

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• Thanks for your post.

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  • Thanks Qasim

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• Hey, Does this calculate stock option compensation expenses under ASC-718?

  Thanks

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  • Kasyap –
    This is the only ESOP model on the internet for startup/investors to plan and manage staff structures.
    I have built in some helpful tools but fundamentally this is a support model that needs to be used with other models.
    You do ESOP math in this model and can feed into your cap table, use to negotiate your hiring plan etc.
    It is not an accounting financial model.
    Alexander

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