Yeah, but each share is valued at a fraction of a cent. The company will have to cut a check for a few dollars. (Happy to explain more if you’re interested!)
No, that means that this one investor THINKS they are worth 10x dollars. Other investors might value the company differently, based on number of customers, cash in bank, their own subjective opinion on the product, etc.
It's complicated! I'll do my best to explain it simply, but there's a lot of nuance.
There's a few different valuations. There's how investors value it, which can be different between investors. There's also a 409a valuation, which is what the government deems it to be "actually worth".
But since the OP hasn't vested, the number that matters here is the strike price at the time the OP got their shares, which is likely ~$100. At some point the OP wrote the company a check for $49 (or so) to "legally buy" their shares (49%). But they haven't vested, so these shares are in a sort of "limbo".
So, the company can't just take them back, since it would be stealing $49. The OP also hasn't earned the shares, per the vesting contract.
This means the company has to pay back the $49 if they're going to take the shares back. It might seem silly to be talking about so little money, but that's all the OP means (even if they don't realize it) when they say the company has the right to buy back the shares.
Can the company in this situation generally force the return sale of the shares for the strike price at the time the shares were issued? And assuming 1/4 of the shares are vested after 1 year, can the company still buy those vested shares? How does valuing those work?
Basically, since the OP didn’t vest. It’s only worth anything if it vests, so in this case it’s less about forcing and more about just tidying up the paperwork from a legal place.
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