Underwater describes a security or position whose current value is below its cost basis or strike price, such as stock options with an exercise price above the current fair market value. In venture-backed companies, Underwater options can hurt retention and recruiting, and Underwater conditions often lead to repricings, option exchanges, or refresh grants.
Ryan RobertsStartup Lawyer
Ryan Roberts is a startup lawyer with more than two decades of experience advising on venture financings and M&A transactions totaling more than $1 billion. He is the author of the Amazon bestselling startup law book Acceleration.
