Ask HN: Employees who exersised stock options: how did it go?

I exercised 8.5k shares for $25k right before Company raised at a “unicorn” valuation to avoid paying AMT because I had no idea where the FMV would end up.

Strike price was ~couple dollars, preferred shares from the round were high teens, and the FMV ended up being a little more than double my strike price.

I’m happy I’m an owner, but probably could of waited until the next round if I knew the FMV was going to be lower. IPO hopefully coming in 18-24 months.

1. Exercised my ISOs at small company A when I quit, because the options were buy-within-90-days-or-lose, and they were cheap, and I felt the company had decent odds of being acquired. They were acquired a couple of years later, and my $300 of stock turned into $15k. So an amazing ROI, but a small enough amount of stock that it didn't really matter.

2. Exercised some NQ options that company B, a customer of company A that I worked with, gave me. They got acquired by company C and the stock zoomed, I sold all, then the acquiring company went bust. Most employees of company B never made any money because their shares were locked up during the period that company C was worth something. I was lucky I was a contractor and not locked up, so I cashed mine in. Made about $60k, or about 4 times what I made from Company A who I actually worked for. The moral of this story is that if you have a lot of restricted stock in a company that's worth a lot of money now but might not be worth anything later, don't assume it will be worth anything.

3. I was an employee at company D when the got acquired by a big company E and all our stock got cashed out. This was a riskless exercise-and-sell transaction, and I made about $20k for my small amount of stock. Not bad, but not life-changing.

4. I was an employee at a pretty big famous public company F that gave us RSUs, and the RSUs roughly doubled in value when I was there. I sold most, kept some, and then the company got bought by bigger more famous company G, causing my remaining shares to turn into cash at another premium. Good deal but I didn't have enough stock for it to be life-changing. I think I made about $40k all told.

5. I was an employee at another big famous public company H, that gave me a significant number of RSUs, and during the term of my employment the stock went up and to the right a lot. This one was life-changing money: I can now afford to retire.

6. I'm now an employee at another big famous public company I, that gives me a decent number of RSUs. Like most of the market, the stock went down a lot back in February and March due to COVID-19 and is since up a lot.

The takeaway? Big company RSUs > startup options, in my limited experience. Of course it really comes down to how the individual companies do, but there are so many more ways employees can get screwed with private companies.

Let this thread be a lesson to all of us: stock options are monopoly money. If a company wants to screw you, they likely already have the language in the option grant agreement to do so. It is not reasonable to pretend like you can fight hungry investors and executives who want to screw over tiny employees.

I've never taken options seriously. That isn't to say that I haven't taken them, I just see them as worthless, and I am fully supportive of negotiating all other aspects of employment as if they are worthless. There are too many horror stories to see options as anything but. Congratulations, greedy leaders, you are ruining the very mechanism that keeps an employee engaged and "bought in" to the company's success!

Name and shame, please.

If the company went through bankruptcy after he purchased the shares and was subsequently re-capitalized and then became successful, his shares would have been canceled in the recapitalization. Likely by dilution to minutia.

Regardless of the method, the company would be required to inform all shareholders of such events. I'd be curious to know how the corporate books were managed at the time he purchased the shares.