"a fish, a barrel, and a smoking gun"
for 19 July 1999. Updated every WEEKDAY.
Know Your Options



Ever wonder if your stock options

in a start-up are worth

anything? You're not alone! In

fact, everyone you know is

wondering what your stock options

are worth. And rest assured,

the greedy, jealous bastards have

been shaving their palms so as

to make them look nice and

clean when they hold them out

the day after you go public.


Most options holders sometimes

feel pangs of curiosity,

excitement, and even fear when

they think about their stakes.

This is all normal. Less normal

are pangs of guilt and bitter

remorse. Really not normal at

all are the pangs of

spleen-rupturing nausea that

come with the abject terror of

base ignorance — base

ignorance like yours. Which is

why we're here to help.


In other words, just take our quiz.


1. Your CEO is:

a) a visionary genius who led
other companies to IPOs or fat
b) an astute leader who understands
today's business environment,
c) a competent manager whose
ideas are sometimes better than
d) one capacitor short of a


2. The offices of your company's
first-round venture capitalists
are located:

a) atop Sandhill Road;
b) in downtown NY, LA, or SF;
c) at an anonymous office park;
d) on the east side of the Fry's
parking lot, over there by the
taco cart.


3. How many rounds of financing
have you completed?

a) 3
b) 2
c) 1
d) Well, they let me expense the office
copy of Twisted Metal 21/2, so
they definitely do have money.



4. How would you describe your
business plan?

a) It leverages a truly unique
value add within a fast-ramping
b) It presents an interesting,
plausible twist on a substantial
c) If Microsoft ignores you, it just
might work.
d) It's really pretty funny when
you think about it in hindsight.


5. Lucy, Bob, and Ron are always
the last ones to leave your office
at night — they can hardly
keep up with their growing
workloads. They're in:

a) sales,
b) programming,
c) custodial,
d) accounts payable.


6. This year, your company will
have revenues of:

a) more than US$100 million,
b) more than $10 million,
c) more than $1 million,
d) that depends on what your
definition of revenues is.


7. The most recent legal document
your CEO signed was:

a) some sort of SEC filing,
b) a hush-hush strategic agreement
with someone code named Allen Paul,
c) a two-year lease renewal
on your current office space,
d) a last-minute revision to his will.


8. How many other companies
similar to yours are out there?

a) Two or three — enough to
validate the idea but not so
many that they crowd the field.
b) None: We're the first off the blocks.
c) It seems like every day I hear
about another one.
d) Considerably fewer than six months
ago; I was wondering what



9. Fill in the blank: My company
strives to be a leading-edge
player in the ________ game.

a) e-commerce
b) portal
c) content
d) dry chemicals


10. Your option's "strike price" is:

a) less than a buck a share — among
the lowest at the company;
b) less than $3.50 — fairly priced,
considering when you started;
c) somewhere less than $10 — not
as low as the person in the next
d) roughly equal to your age in
dog years.


11. Your VC's exit strategy is:

a) sticking it out until a public
b) selling the company
to an industry giant at the
first reasonable chance,
c) quietly folding you in with a
more promising member of the
d) out the door, down the back
stairs, and into his Lexus.


12. Every day around 6:30 p.m.
your T1 line gets really slow.
This is because:

a) the commerce servers get
crushed with hits when your
e-store's Special Sale Item is
posted each evening,
b) your CEO is high-bandwidth
videoconferencing with Softbank
in Tokyo,
c) your hackers are all playing
Quake against some guys over
at Oracle,
d) it takes the mice that long to gnaw
through the Reynolds Wrap your CTO
"repaired" the line with at 9:30 a.m.


13. The reason your company lost
money last year was:

a) every sale made was a "loss leader" —
but market share doubled,
b) spiraling legal and banking costs
from acquiring so many competitors,
c) R&D expenses were much higher
than anticipated,
d) it really seemed like '98 was
finally going to be the multimedia
CD-ROM's big year.



14. In your gut, you feel:

a) your company is doing
something really big,
b) it's doing a good enough job in
the right place at the right time,
c) doubt,
d) unabated pangs of nausea from
abject terror.




Give yourself five points for

every (a), three for every (b),

zero for every (c), and minus

three for every (d).


52? You're a Winner

Figuratively speaking, of

course. Let's not forget

you're reading Suck for

financial advice.


35? Base Hit — If the

market doesn't burn out, you

might get a car out of it. If it

does burn out, you get only the

drive shaft.


15? Also Ran — You'd

better love what you're doing.


14 on down? Horrible Mistake

Your options are worth the

paper they're printed on. Unless

it's nice paper, in which case,

they're worth less.

courtesy of Johnny Cache

[Purchase the Suck Book here]