331–340 of 586 posts
If your shares have this restriction they are practically worthless. Also be wary of sneaky language on page 40 of a random document signing away your ability to sell--have seen this from otherwise-reputable Silicon Valley names.
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It's not just "aren't IPO-ing" - the rapid sale described is often banned today under agreements where shares can't be offloaded for a certain period after the IPO, so that the banks backing the offering can make their money.
That's pretty crappy. Another way to prevent anyone but the founders and investors from capturing any value from the IPO. Instead of selling your shares right after the IPO, couldn't you trade options on those shares in a way that closely simulates selling the underlying equity, and stay within the agreement?
On the options - I'm honestly not sure. I don't think it's barred by contract (since that's about managing actually control and share movement), but I don't know what options trading looks like for newly-IPO'd stocks.
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More than half the population lives on the coasts. Most of them are "regular people", too. The problem with our tax code is the same as the problem with the rest of our laws: pandering politicians push through complex and expensive trash because it makes either their constituents or their donors happy. For taxes specifically, normal people have complex taxes because of the dozens of deductions and credits that hide t…
All of that, plus tax software companies, such as Intuit lobbying against simplifying the tax code. https://techcrunch.com/2013/03/27/turbotax-maker-funnels-mil... And once again we reach the conclusion that corporate lobbying and donations are the "root of all evil" in American politics, and everything is broken because of it. Larry Lessig has been right all along when he said this needs to be fixed before anything…
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This reads like a Faustian bargain. I've seen this sort of stuff happen over and over to my colleagues, it was worst in the late '90s and early '00s. As much as I wanted to work for a startup once in my life, I learned that the only way to do "startup" is if you are the founder. Practically everyone else is along for the ride. The US used to have a steady IPO market but that has dried up in recent years. I have read…
"The US used to have a steady IPO market but that has dried up in recent years. I have read that 2017 might brighten things a bit, but we'll see." The biggest problem is SOX: going from a private company to public (something I've done twice, now) is a pain, and can take a year to implement all the regulations (you may even need to change source code, and also commit processes). It's even worse on the accounting/busin…
A security nightmare, but time and time again we've seen you don't need good security to make a lot of money.
As always the main rule you need to live by is value the equity at zero and you'll be (maybe) happy. Short of being a founder (and thus not really being offered equity) I have never treated these things as anything beyond a minor on paper "bonus". Given you'd be lucky to get anything more than 1% even as a first employee I find them next to worthless as early stage motivators. Which is how everyone seems to play it -…
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Declare as what? It's treated as income - you declare it, and you pay tax on it.
I meant declare as part of the cost basis. IE, if you are paid $5000 / week and you can optionally take $1000 of that as options, and you do so, why doesn't that $1000 become part of your cost basis?
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But wait, there's more... Let's say that you decide it's too risky to early exercise in year 1, but by year 3 things are looking pretty good and you early exercise all your options. Let's say your strike price is $0.20, and now the FMV is $0.75, and you're exercising all 10,000 of your shares, including 2,500 that haven't vested yet. When you exercise, you file an 83(b) so that you get taxed (AMT) on the full $5,500…
Err, are you sure you can't take a capital loss on the $1,031.25 spread? Not that I would benefit personally. I am still burning through years of capital loss carryover from ZNGA.
I'm not an accountant nor a tax expert. My layman's understanding of that clause is that (1) the amount paid was $375, and (2) the amount realized was $375, so the buyback nets $0.
Could the nonvested shares somehow be defined as "a capital asset in the hands of the taxpayer" with a cost basis of the FMV at exercise time, even though they're not technically property of the taxpayer yet? Perhaps it depends on the specific terms of the early exercise and the buyback?
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Sure. The article is about the problems that one faces if given stock options. If instead you get stock certificates then you don't have those problems.
Is getting actual stock instead of stock options even a choice?
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It would behoove everyone to learn the basics of the terms you are getting stock. I have been through it and know. It will take you a couple afternoons of casual reading to nail it down. But to save you some time let me give you a template for the type of stock option deal you want and you don't want. Don’t want 1) 409A valuation price is already in the multiple dollar range. a. Why : You can’t afford to exercise do…
> 1) 409A valuation price is already in the multiple dollar range. a. Why: You can’t afford to exercise do to tax burden. The value of one share isn't meaningful. You should calculate the exercise cost of the whole grant (based on the last 409A) to see whether early exercise + 83(b) would be a good option. > 2) No acceleration – e.g. in the event of sale or IPO your unvested shares DON’T fully vest. a. Why: You shoul…
4) True, this is just generic advice and usually by the 3rd round your % is going to be VERY low. But of course always consider actual % taking TSO into account.
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Where are you living where entry level software engineer salaries are north of 200k? I'm in the bay area and base salaries for software engineering with a bachelor's degree range from 90-115k from what I've seen (generally with some stock options and bonus potential added on top but I've never met anyone who's come even close to 200k starting out)
He's talking about Google and Uber. Those definitely pay around that much.