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Friday, February 25, 2011

[StartupQnA] How do I benefit from Stock option in my firm?

Questions that need your attention [courtesy StartupQnA.com, the helpdesk for Entrepreneurs.]. Please hop to StartupQNA site to answer the queries.

Qn: How do I benefit from Stock option in my firm?

I have been working at a 4 year old startup firm for the last 1 year and 4 months. In my last appraisal, I was offered a 2% vested Stock Option by my CEO. Right now, no legal document has been signed or given, only a verbal assurance and an offer letter on the company letter head. The option that he has explained to me is that I will keep getting 0.5% of the Stock Option for the next 4 years (a total of 2%). If I leave after 1 year, I will have a total of 0.5%, if I live after 2 years, I will have 1% and so on. In addition to that, he mentioned that I can monetize this only when either the firm issues IPOs or is sold/acquired.He also said that the detailed Terms & Conditions shall be drafted later.

1. Is it really a good option to stick with the firm for the next 4 years?

2. What all legal formalities need to be kept in mind with regard to this Stock Option?

3. Can it happen that the company doesn’t go public and is neither sold? What happens to my Stock Option in such case?

4. Is it really a profitable option in terms of money?

5. Assuming that my firm’s current value is X million dollars, can I expect to get 2% of X million dollars in cash after 5-6 years?


Qn: How to account TDS on Facebook ads in India?

If i pay for facebook ads through my company credit card, how do i account for TDS? The billing for facebook is done from Ireland, and some local VAT is accounted. But how do I deal with the TDS in India? Is it accounted under importing of service?


Qn: Investing in a startup

I’m planning to invest in a startup which was successfully running for 1 year. Startup has generated around 30lakhs of revenue with 50 lakhs of investment.

I would like to know,
1. how to estimate the number of stocks i would expect for the amount of money that i invest?

2.If i want to consult with someone it should be accountant/ lawyer?


Qn: SOW for SEO

I’m launching a BTB website and want SEO help.  What are the parameters that I need to keep in mind when selecting a SEO consultant?  What should the defined scope be.  I usually list out the measurable results that I want and link the results to compensation. Should it be the same for a SEO consultant as well?


Qn: What’s The Average Customer Acquisition Cost for ecommerce sites?

What’s the average Customer Acquisition Cost for ecommerce sites, especially in India?


More Questions

- How difficult / competitive is the Mobile Banking technology sector to start up in India at this point?

- Financial liabilities of a director in the event of death of fellow director

- Need information about SMS Gateway providers in India


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