I have never invested and I'm so confused with what the startup has told me. They are my friends and I trusted them so I didn't do thorough research. (I know I know) They've cashed my check already, but as I read more, I started to have more questions. Please help!
I'm both an employee and an investor of a brand new startup. At the time when I invested (or agreed to give $ for equity) neither a product nor a demo was ready. However the valuation jumped 10 fold since the first investor put in money. They explained that the earlier investors carried more risk at the very beginning and when I invested, the product was half way done. Say, the first few investors received 10% for 25k and I received 2% for 10k. Let say the company gives me 4% equity share as an investor and 1% of the employee pool. Is that a reasonable jump when the product was not even finished (no demo was shown whatsoever?) I invested for the idea pretty much (like the earliest investors).
Recently, I asked about what the company valuation is and how many shares does my 4% represent. CFO told me that there is no point to talk about "shares" or "stock" since the company is not public. Is it right?
I asked if my investor portion equity will be subjected under a vesting schedule, CFO said yes. That doesn't make sense to me, because I bought those 4%? Aren't those supposed to be fully vested? I agree to my employee equity to be vested.
So confused... please help. Thank you in advance!