211–220 of 243 posts
There's clearly wildly different assumptions at play here. Can someone smarter than me spell them out? One that jumps out is the assumption here that no employee stays past 3 years. Isn't that a pretty high attrition rate for a pre-IPO startup?
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you've had no close friends who've lost their options, or had their options become worthless when companies fail? You're one lucky person to know!
Of course I have seen people lose. I've personally lost on options as well. I didn't make the assertion that you can't lose. With options, you are betting that the company will not fail and that it will become much more valuable. Both are statistically unlikely. You are also betting that you won't leave or be otherwise eliminated before the exit. Mainly I'm framing this in comparison to additional salary which is als…
Something like 90% of companies fail in 5 years...
Are there actually any startups offering RSUs?
[1] https://www.acc.com/chapters/wisc/upload/The-Rise-of-Restric...
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Where do a lot of them tend to end up if they jump ship, and where to they tend to end up if they don't have the foresight to jump ship and are fired?
Every other industry. (Including and especially tech.) A good portion of the business people you meet outside of finance are people who wanted to work in finance but couldn't hack it.
There was a PE firm that came around about 4-5 years ago trying to raise money on this very premise. Their thesis was that - startups would remain private longer. - employee's lost their options when they leave - longer periods to go public means more employees return options to the pool which means employee option pools can be smaller - longer private periods leads to more rounds raised which benefits investors over…
Where are all these secondary market companies "arbing" it out on employee stock option liquidity? The market should be HUGE, both for locked-in employees, and for buyers who want a small discount on hot startups. This would totally solve the 90-day exercise period problem for the employees, without requiring company goodwill. Some companies like ESOFund, 137 Ventures, EquityZen can do deals without company involveme…
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Many "single people" in the Bay area make less than 40k/year. They don't starve. If you are single, living in the bay, and making 100+k and not saving like a bandit it's because that's your choice.
I don't know what housing costs you must be talking about then. $40k/year pre-tax is close to $2648/month after state and federal taxes, and you're saying that with Bay area housing prices, you're not starving? I'm guessing that's also with no school loans or trying to work and pay your way through school, which probably applies to a very small fraction of the population.
If you consider Walmart and McDonalds employees then that's a large part of the us population.
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Do you actually believe that as a non-founding employee you'll be able to make the difference between the company delivering "a life changing amount of money" to employees instead of the far more common outcome? I guess the same type of mind that believes meritocracy really exists could believe such a thing...
Do you believe companies can accomplish anything they envision, without employees? Or do you think employees are entirely fungible? Does my last employer not have a large contract with Prudential, because of my work?
This is what every self-respecting capitalist believes and knows in their heart. Employees are resources. If a founder doesn't know that they will fail.
Maybe you thought startups were an exception and that startup employees are unique snowflakes but BigCo employees are drones?
> Does my last employer not have a large contract with Prudential, because of my work?
If that contract is what made the business viable, then the company must be completely fucked without you and be on their way to failure. If the contract didn't make a substantial difference in the company's outlook, then how does that relate to my point?
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How much is needed for something to qualify as "significant wealth"? You seem to be dismissing differences in salary as unimportant, so it's fine to take a pay cut in exchange for even a small chance at significant wealth, because that's all that matters. Let's say the salary difference is $50,000/year. Over 20 years, that's maybe half a million dollars, post tax, that you gain by ditching options. Maybe that's not s…
For a new grad several years ago comparing offers between say Uber, Airbnb, Stripe, Google, and Facebook, the mid-stage private companies like Uber/Airbnb/Stripe are likely paying $100K, while Google/Facebook offer barely more at $120K or so. However, the Google/FB overs likely include RSUs valued at $400K that vest over 4 years, while the private companies offer options (at the time) "worth" (at current company valu…
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Here's an article at random discussing the impact of RSUs on AMT: http://www.mossadams.com/articles/2014/july/tax-planning-for... . It seems unlikely there's no impact.
If anything, it argues you are less likely to be in AMT with RSUs: "In years when large blocks of RSUs vest, your ordinary income tax will usually exceed your AMT due to the additional ordinary income. As long as that’s the case—you’re not in AMT—you can use state income tax and property tax deductions to reduce your ordinary income tax liability. If you’re likely to be in AMT next year (say, because you’ll have fewe…