Price Per Share
The dollar value of a single share, calculated as valuation divided by total shares outstanding.
Definition
Price per share (PPS) is the value of one share of stock, calculated by dividing the company's valuation by the number of fully diluted shares. In a funding round, PPS is the price new investors pay per preferred share. The common stock PPS (set by the 409A) is typically lower. PPS is essential for calculating the value of your equity holdings.
Why it matters
Your equity value equals your shares multiplied by the current PPS minus your strike price. When negotiating a job offer, knowing the PPS, your share count, and the fully diluted share count lets you calculate your actual ownership and potential upside.
Example
A company raises at $100M post-money with 20M fully diluted shares. PPS is $5. You have 20,000 options at a $1 strike. Your paper value is (5 - 1) x 20,000 = $80,000.