The “Millions in Options” Founders Say They Gave Up—What Were They Really Worth?

Originally published on Substack.

Last year, I joined a startup valued at roughly RMB 5 billion.

The offer included stock options. Based on the company’s valuation at the time, they appeared to be worth several million yuan. Later, for various reasons, I left. Six months afterward, the company completed another financing round, and its valuation rose to RMB 30 billion.

A neat story immediately presented itself:

Those options had increased sixfold. The price of my departure had supposedly grown from several million yuan to tens of millions.

It contained everything a startup story requires: numbers, fate, regret, and the faint suggestion of heroism. With only minor editing, it could have appeared in a resignation announcement:

“I gave up options worth tens of millions to start over as an entrepreneur.”

Startup circles are fond of sentences like this. They transform what may have been a confused, hesitant, or even awkward departure into an act of sacrifice. The person did not merely leave a job. He pushed a chest full of gold back into the sea and walked alone into the wilderness.

But the truth is usually less dramatic.

The chest may never have been opened. No one knows whether it actually contained gold, who owned that gold, when it could be removed, or whether the entire chest would eventually sink.

A higher valuation can enlarge the number attached to an option grant. It cannot automatically turn that number into wealth.

1. The startup world’s favorite rhetorical trick is turning “might have owned” into “gave up”

When a private company’s valuation rises from RMB 5 billion to RMB 30 billion, it means that investors in the latest financing round were willing to pay a higher price—under a specific set of terms—for a relatively small portion of newly issued shares.

It does not mean every existing shareholder can sell at that same price. Still less does it mean that every option held by a former employee has instantly become cash.

For an employee, options must travel a long road before becoming money.

They must vest.

They must be exercised.

The employee must pay the strike price and, in some jurisdictions, taxes.

Then comes the wait for an IPO, an acquisition, or a company-approved secondary sale.

Even if an exit eventually occurs, the final outcome still depends on liquidation preferences, dilution in later rounds, share class, lockup periods, and the amount the holder is actually permitted to sell.

An options spreadsheet that says “worth RMB 30 million” may describe an asset that cannot be sold, cannot be pledged as collateral, has not fully vested, requires cash to exercise, and may be diluted again.

It is a contractual right. It is not necessarily a usable asset.

This is why, during the long slowdown in technology IPOs, secondary markets became a pressure-release valve for startup employees. Private-company shares are far less transparent and liquid than public securities, and sellers often accept substantial discounts. Companies such as Stripe, SpaceX, and OpenAI have repeatedly arranged employee share sales not because their headline valuations were too low, but because valuations do not pay mortgages, tuition, or medical bills.

In 2024, Stripe arranged an employee share sale at a valuation of about $65 billion. By 2026, another transaction involving employee shares valued the company at $159 billion. What changed employees’ lives was not the number in the headline. It was the existence of a window in which they were actually allowed to sell part of their holdings.

Valuation tells you the price someone recently paid to buy into the company. Liquidity determines whether you can take your portion home.

2. A real sacrifice must satisfy one simple condition: you could actually have converted it into something

When founders talk about what they “gave up,” they often mix together three very different things.

The first is cash already earned: salary, bonuses, or dividends that have reached the bank account.

The second is a highly probable and nearly realizable benefit: vested shares with a defined repurchase window and a willing buyer.

The third is a future possibility: unvested options, paper wealth calculated from the latest funding round, and an imagined outcome dependent on continued growth, a successful listing, and unchanged deal terms.

The first two represent genuine opportunity cost.

The third is closer to a lottery ticket.

A lottery ticket is not worthless merely because the draw has not taken place. But no rational person would say that tearing up a ticket meant “giving up RMB 300 million” simply because the jackpot had risen to that amount.

Yet this is precisely the mistake people often make when describing startup equity.

The company’s valuation rises sixfold, so the employee’s options are said to have risen sixfold. The employee leaves, so all of that unrealized appreciation is counted as the cost of becoming an entrepreneur. The rhetorical advantage is obvious: a founder can acquire the moral weight of having sacrificed RMB 30 million without ever losing RMB 30 million in cash.

It is a very inexpensive form of courage.

Real courage is usually less photogenic.

It may mean selling a company that already generates stable cash flow and giving up income that arrives every year. It may mean using personal savings to cover the team’s final three months of payroll. It may mean paying suppliers in full even as the company approaches closure. It may mean rejecting a lucrative but unsuitable order and watching the bank balance decline in real time.

Wealth without the right to sell belongs in a memoir. Money that could arrive today belongs in the calculation of opportunity cost.

3. Why investors will not accept the “tens of millions” at face value

An investor’s professional habit is to dismantle stories and return them to their contractual terms.

A founder says:

“I gave up RMB 30 million in options to build this company.”

What the investor actually wants to know is:

How much of the grant had vested?

What was the strike price?

Did the options survive the employee’s departure?

Was the former employee still permitted to exercise them?

Did the latest valuation apply to common shares or to preferred shares carrying special rights?

Had any secondary transactions actually taken place?

At what discount could those shares realistically have been sold?

If the company exited below the last-round valuation, how much would remain for common shareholders after preferences were paid?

These questions are not romantic, but they are closer to business reality than the phrase “I gave up millions.”

The valuation resets of the early 2020s offer useful examples. Instacart was valued at roughly $39 billion in a private financing round in 2021, but entered the public market in 2023 at a valuation of about $9.9 billion. Reddit’s expected IPO valuation was also below its previous private-market valuation. Carta data showed that roughly one in five startup funding rounds in 2023 was a down round. The number highlighted in a funding announcement has never been an irrevocable certificate of wealth.

WeWork provides the more extreme footnote. Once valued at $47 billion and described as one of America’s most valuable startups, it filed for bankruptcy protection in 2023. Valuation can appear quickly in a conference room and disappear just as quickly in a courtroom filing.

A mature investor will therefore not automatically think more highly of a founder simply because that founder claims to have abandoned a large option package.

The investor may instead examine something more revealing: whether this person understands the difference between nominal value, expected value, and realizable value.

A founder will eventually issue options to employees, explain valuations to investors, and decide when shareholders may obtain liquidity. A person who treats every increase in valuation as wealth—and every unrealized gain as sacrifice—may eventually confuse the company’s financing price with its operating achievement.

One of the most dangerous startup illusions is mistaking a capital-market quotation for cash the company has already created and the founder already owns.

4. Paper options are not entirely costless

None of this means we should swing to the opposite extreme.

Leaving a rapidly growing company can create substantial and genuine losses.

Vested options may expire because of a short post-employment exercise window. An employee may lack the cash needed to pay the strike price and taxes. Some equity plans may even tie the retention of options to the employee’s later career choices.

More commonly, a departing employee simply cannot know where the company will ultimately end up.

He is not giving up a certain RMB 30 million. He is giving up a future with a probability distribution.

That future can be valued, but not by simply multiplying the latest financing valuation by the employee’s ownership percentage.

A more honest statement would be:

“When I left, I held options that had not yet been monetized. Based on a later financing round, their paper value eventually reached tens of millions of yuan. Whether they could have vested, been exercised, and ultimately sold still depended on many conditions.”

This sentence is less dramatic than “I gave up RMB 30 million,” but it is closer to the truth.

And truth has one advantage: it does not require heroism to sustain it.

5. The real costs of entrepreneurship are the things that do not look good on social media

When someone leaves a job to start a company, what he actually gives up is usually not the valuation in a press release, but a set of more mundane things.

A salary that arrives on time every month.

A family’s sense of security.

A career path built over many years.

A promotion that might have come next.

Evenings that could have been spent with one’s children.

The certainty that, in illness or crisis, an institution would still provide support.

And, most importantly, time.

These costs are difficult to compress into a dramatic integer. They do not suddenly increase sixfold when a company closes another financing round, and they rarely produce applause on a conference stage. Yet they are deducted from life every day.

Founders do need stories. Without stories, few people will follow a company through years of uncertainty.

But perhaps one of the first things a founder must learn is how to distinguish between two kinds of story.

One helps other people understand risk.

The other helps the founder forget it.

“I gave up tens of millions in options” often belongs to the second category. It takes a complex, probabilistic, illiquid contractual claim and rewrites it as cash already sitting in a pocket. It then turns a career decision into an act of heroic self-amputation.

This makes entrepreneurship look noble. It also makes failure easier to forgive.

But a startup does not become legitimate because its founder claims to have abandoned something valuable. It becomes legitimate only through what the founder later creates.

In the end, investors do not care how much the chips on your previous table were supposedly worth at their highest quoted price. They care whether, at the next table, you can use limited cash, time, and credibility to build a system that creates value repeatedly.

So I am willing to call those options—later said to be worth tens of millions—a missed opportunity.

But I would not call them a sacrifice.

A missed opportunity belongs to fate.

A sacrifice belongs on the balance sheet.

The true cost of what you gave up is not what someone later claimed it was worth. It is what you could actually have exchanged it for at the time.