A $400K OpenAI Grant Is Worth Only ~$242K — The Math of Private Equity Grants
aakashgupta · x · 2026-10-05
The author shares a formula for valuing private-company equity grants: Value = quoted equity × P(payout) ÷ 1.15^years to liquidity.
- A $400K Google grant is worth $400K — public stock is sellable on vest
- The same OpenAI grant, at 2 years to a sale with 80% odds: $400K × 0.8 ÷ 1.15² ≈ $242K
- 1 year at 90%: $313K; 3 years at 70%: $184K; a Series C grant with IPO 5 years out at 40% odds: $80K
- The 15% discounts illiquidity; the formula ignores upside — OpenAI went from $157B to $852B in 17 months, so treat it as a floor
Advice: compare offers on today's realizable value, then negotiate the gap into base and sign-on.
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