I was going through this article and understand that once the option pool was created it was not included in the calculation when the company received a valuation of 1$M valuation.
But once the angel investor invests , the next round the valuation is based on only 66.66% of the company which means it doesnt include the option pool and the angel investor equity stake.. why is this so ?
in the next round .. all the equity except the first employee stake is included to calculate the % to be issued to the public ?
Clarity on this and are there any standards or specific guidelines followed ?
I was going through this article and understand that once the option pool was created it was not included in the calculation when the company received a valuation of 1$M valuation.
But once the angel investor invests , the next round the valuation is based on only 66.66% of the company which means it doesnt include the option pool and the angel investor equity stake.. why is this so ?
in the next round .. all the equity except the first employee stake is included to calculate the % to be issued to the public ?
Clarity on this and are there any standards or specific guidelines followed ?