Want to understand what you'll make if the company you work for is acquired? Here's a simplified calculation to give you a very general sense. What you'll need: 1. What % of your Company's fully-diluted shares you own
What is fully-diluted? This is the % of the whole pie that everybody holds if any and all preferred stock is converted to common stock. Normally employees and founders are granted common stock. When investors invest in the company they get preferred stock. Preferred stockholders typically get more rights than common stock holders. They often have the ability to take their money out first when the company is acquired (this is called a liquidation preference). Why? Because they put in the money!
2. What amount your company was acquired for
3. How much money your company raised in investment
If the company is acquired for an amount greater than the amount invested - this calculation is easy. It's simply company value (e.g., $100 million) minus any previous investment by investors (e.g., $10 million) multiplied by your % ownership (e.g., 1% or 1/100).
Remember this is an over-simplified example. There is a lot that can complicate it - like liquidation preferences of investors, vesting schedules, etc.
So you should get $900,000. You can use the calculator below to work it out!