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I have just received some of my first stock options in a company. The paperwork states the FMV of stock, my exercise price, and the total number of shares reserved for employee options. However, I don't know the total 409a valuation of the company itself, so I'm not sure what valuation the option price is based on. Are companies required to disclose this information when options are exercised?

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    Just curious, what would you do with knowledge of the total valuation?
    – Craig W
    Jun 1, 2021 at 0:55
  • Evil evil things. But seriously, the lower the total valuation the more incentive there is to exercise your options and roll the dice that things will go well and you'll only get hit with capital gains. The higher the 409a the less of an upside there is to exercising. I've got a rough idea of what a successful company like us might be worth in an acquisition, but less of an idea of what the 409a is.
    – Ian
    Jun 1, 2021 at 21:33

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The company is not required to share the last valuation with you, and probably won't. They did a valuation at some point recently, and your option strike price will be based on that value.

I would certainly ask about the valuation though, and try to convince them to tell me - but like I said they probably won't.

If you knew the total shares outstanding, you could back into the valuation based on your strike price. But they won't tell you the total outstanding shares either.

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