How Many Stock Options Should Be Offered?
- Stock option offers are tough to predict due to the multitude of factors involved, but simply knowing if a company is new or well-established is information enough. Company potential and risk go hand-in-hand with start-ups, so option packages usually consist of much larger percentages of total shares outstanding than normal.
- Experienced companies can't usually offer such big pieces of their stock option pie, but in return they often promise relatively risk-free options with much clearer futures. The overall amount of stock offered is quite small, but this is just a reflection of the value of the company's shares overall.
- Although there are certainly some more effective (albeit much more complicated) ways to breakdown just how many stock options should be offered in a given situation, take a closer look at the company involved to quickly become aware of where things are headed.
