1 yr in at a startup, but still no options contract? (mentioned in offer letter)

[K-12FI]

Hi,

I received a job offer with mention of options. However I have not received an options contract. I've since learned about 83(b) elections, and know employer is talking to VC about investments. I feel like I'm missing something here. Should I have already received an options contract and had the chance to early exercise? I don't want to miss out on getting shares at a lower valuation!

Also, will my stock vest at year after hire date, regardless of having received the options contract? Really confused on that as well.

Here's the language from my offer letter. I also included a link to it below:

"... if you decide to join the Company, it will be recommended at the first meeting of the Company’s Board of Directors following your Start Date (as defined below) that the Company grant you an option to purchase 75,000 shares of the Company’s Common Stock at a price per share to be determined by the Board of Directors. Vesting of the Option will occur over a period of four years with vesting as to 25% of the options granted to occur on the one year anniversary of the commencement of your employment (your “Start Date”) and the balance to vest in equal monthly increments each month thereafter...."

Also of note: company is currently ~20 Full time employees, of which I was number 9. CEO (who offered me the contract) is also founder.

[clifp]

As you suspect this is a potentially serious issue.  There so many gimmicks that can be used to affect option pricing, that you could easily get screwed.

If I were you I'd ask to get a term sheet for any fundraising the company had the year before you joined, and especially any that has occurred since you joined.

I can see a 4-5 month delay to get pricing on your options, but a year is really excessive.

[bryan995]

Normally options grants are approved, valued and issued every board meeting.  Most boards meet every quarter.

You should have had your option grant issued by now, and if you are able to early exercise, you could then do so and then file the 83(b).
What stage is your company?  Seed?

Most options vest monthly for four years with a one-year cliff.  The 1 year cliff timer does not start until your options are granted/issued.   It does not go by your hire date.

The language you shared is very common/normal.  So perhaps they simply have not yet had a board meeting? 

I'd push on this and mention the desire to early exercise + file 83b.  Can you ask other employees if they have received their options/grants?

p.s. most companies give 1 large grant at hire, and then yearly refreshers.  You might want to also find out how many outstanding shares there are and what your percent ownership in the company is.  Being #9, you should have a decent stake.  0.25% - 1% depending on your level/role.