Private company valuations

Be it about investors, co-founders, hires, freelancers, family, or yourself

Currently the authorised capital is 10lakhs, 1lakh shares and share price is 10. 50% stake is with me and 50% with my friend. We are building an app and need to hire some interns, pay some bills. My friends dad has agreed to give us 3 lakhs but wants 5%. My understanding was that this would be easy and we can just increase share price from 10 to 60 and issue roughly 5000 shares. But CA says that this will require a valuation report to be submitted to the MCA to justify share price increase on books. Is this true? Company has zero assets and liabilities obviously.

Truths about ESOP 101 After working in multiple fast growth startup’s and having been part of multiple buybacks as well as being in the startup ecosystem for a decade I want to put to bear my pov about creating wealth through ESOP. Like any other randomised event, ESOP also follows Pareto principle which means a very small number of people within the company ever make sizable wealth that they elevate to the top 0.1% of the country. The Pareto also applies with companies; significantly small minority of companies in India have employee friendly policies which enables an employee to create wealth. Most startup’s have dark patterns within their esop policy which either locks you in for insufferable durations or forces you to pay exorbitant taxes to gain the right to exercise your esops when you are leaving the company. Survivorship bias plays a huge role in enabling the narrative that esop is a great wealth generating tool leading to rude awakening for an employee after they join a company. This doesn’t mean you can’t make wealth, it just means don’t get carried away by narratives and take preventable errors in your career. Always talk to multiple people in startup’s and ask relevant questions to understand esop policies better. Like everything else optimising only for esop for wealth creation will mostly not result in it.

This may sound like a dumb question, but why do these companies fire just before the IPO? isn't an IPO a good thing? More cashflow. Shouldn't they be taking care of their employees who made it reach there? What exactly is the thought process behind this mass layoff before IPO?

I am at a VC backed early stage startup. Have been offered Esops.l but have no clue on this. Can somebody explain to me how can I make money from ESOP by answering these- 1) Do I have to buy them post vesting period? If yes, what amount do I need to pay? Also will there be text on this purchase itself? 2)) When the company buys back from me assuming my vesting was over and I could hold them on, what's the amount I will get? I am assuming it's (no of options * current share price) - (no of options * strike price issued to me). Is that correct? If yes, how is the current share price calculated for non listed company? 3) Now when the company buys these, what's the tax I have to pay? I am trying to understand if availing options and selling options are different and if both have taxes 4) What happens in IPO? Who buys from me? Where can I sell? What price do I sell at?

I have around 2 years of experience. 1) 10 months in pervious company with 6 month internship and 4 month full time. 2) 1 year 1 month in current company. I recently applied for a company and was offered an MTS role. ( 18 cash, 50 private RSUs + additional benefits) Total CTC is approximately 34 LPA The offer sounds overwhelmingly good based on current market standards but when I checked company’s stock price in secondary markets, they are worth less than 50% of what was quoted by the recruiter. Right now I am a bit skeptical on the stock price as the company has not yet gone public but they plan to in next couple of years. Not sharing company and personal details for obvious reasons.

Currently in talks with the CEO of a small international startup (less than 10 total members spread across 4 countries). My existing profile is an exact match for what they are looking for in a candidate (they are implementation partners of my existing company's software). I am pretty close to closing it but now he wishes to know my existing salary. I tried to avoid sharing it but he wants to know it before quoting anything to me. I wish to get a huge raise (80-100%) since i will be moving from a known brand to an unknown startup with all the skills they need and more from Day 1. Any tips on how I can handle this situation?

How much ESOPs can I ask from an early stage startup (incubated). Valuation is around 12 cr. I have agreed to take a 50% paycut on my fixed, but not sure about ESOPs. Please advice.