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What I Wish I'd Known About Equity Before Joining a Unicorn

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Re: What I Wish I'd Known About Equity Before Joining a Unicorn

#521

Post by mcpherrinm »

bankim wrote: post #422
daave wrote: post #414

Earlier quoted context omitted.

Did you consider using something like ESO Fund to finance the exercise of your options? If so, why did you decide not to use them? Assuming they're willing to do the deal, if your alternative is letting the options expire worthless, it seems like a no-brainer to take a loan with no recourse unless there's a liquidity event. You wouldn't have made the full $300k, but at least a solid portion of it.

ESO Fund's website doesn't mention about their cut in case of liquidity event. Do you happen to know how much is it?

I think they price depending on the company and its situation and risk. I've heard of them taking half the proceeds, though.

Re: What I Wish I'd Known About Equity Before Joining a Unicorn

#522

Post by romanovcode »

khazhou wrote: post #372
romanovcode wrote: post #14

Earlier quoted context omitted.

Exactly what everyone should do. If someone is obsessed with these kind of topics I think he should start his own startup and be a founder/co-founder.

So if you want to make big money at a startup, you have to found your own or gtfo?

I think the point is that if you believe you have a decent chance to make a lot of money out of your 1% shares you are naive and a bit stupid.

Re: What I Wish I'd Known About Equity Before Joining a Unicorn

#523

Post by aclsid »

superqd wrote: post #460
pikzen wrote: post #424

Earlier quoted context omitted.

I'm sorry this has happened to you. I hope it can serve as a warning to other HNers that companies are not your friends, and that it's never worth investing yourself like crazy in it as an employee. Any employer will throw you under the bus as soon as possible, and possibly has already planned that in the contract you signed. That applies to three person startups all the way to gigantic multinationals. Enjoy your per…

Very much this. There is a bit of a lie we all participate in at many companies of nearly every size, though sometimes much more so at small startups. The lie is that we are all on the same team and all in this together. In reality, the team are those who actually own the company by virtue of the money they've put in (i.e., investors). Time is regarded as a non-asset, regardless of how much you invest into the compan…

Or you just charge a good salary, since after all if one is to be an employee, let's keep things good for everybody. To the owners, this is your company, and for us, hell if you want to build a rocket to the moon I'll help but this is my fee.

Re: What I Wish I'd Known About Equity Before Joining a Unicorn

#524

Post by conjectures »

e12e wrote: post #508
pinewurst wrote: post #495

Earlier quoted context omitted.

That's the point. :)

To expand, it's a play on: "Under capitalism, man exploits man. Under communism, it's just the opposite." which seems to be attributed (without any sources) to John Kenneth Galbraith: http://www.quotationspage.com/quote/810.html I've also seen it as "Under capitalism, man exploits man - under communism it's the other way around." I always assumed it was a translated Russian proverb, along the lines of: "No truth in t…

Enjoyed the sovietology fact :)

Re: What I Wish I'd Known About Equity Before Joining a Unicorn

#525

Post by conjectures »

kaspiCZ wrote: post #511
amasad wrote: post #434

Earlier quoted context omitted.

I have a similar experience -- albeit only 2 years -- when I left I was faced with $30k (pre-tax) and didn't have the money and was actually in debt. Not to mention the battle scars: anemic, overweight, depressed, and cynical. Luckily I've recovered now and started my own company. In addition to a 10 year exercise window I try to educate our employees and potential employees on this matter and to be as transparent as…

I'm in a somewhat similar situation to you, but on the upward slope. If you don't mind, what was the breaking point for you? How did you approach your recovery? How much time and effort did you put into getting your business off the ground? How do you manage to combine enjoyable work with delivery (nowadays it is the mantra - everything has to at least help provide value for customer)? How do you handle employee's fa…

Don't sweat getting older. My theory is that the capacity to learn doesn't really degrade much if it's used regularly, and that the real issue is that incentives change for older demographics.

Re: What I Wish I'd Known About Equity Before Joining a Unicorn

#527

Post by katzgrau »

"The 'you' of today needs to protect the 'you' of tomorrow."

Amen. Don't ever be afraid of looking out for your own financial interests. If you aren't, you are at a disadvantage. Anyone who makes you feel "unseemly" for minding your own benefit (which tends to be a lot of people) is either naive, a stooge, or someone else looking out for their own best interests.

Re: What I Wish I'd Known About Equity Before Joining a Unicorn

#528

Post by katzgrau »

pinewurst wrote: post #425
superqd wrote: post #412

This has caused me some level of sadness in the past. I worked for a startup (started 6mo after founding with only 20 people and stayed for 8 years to 200+ people and 50million in revenue). During a number of phases, I worked for months at a time giving up weekends, late nights, holidays and even vacation time to get product out the door and beat the competition. I racked up 50k options, mostly all for less than a do…

8 years of weekends, late nights, holidays and vacation for a net of $200K after taxes? That's ~25K/year so if you would've worked a regular 40 hour week, 20 hours of contract work at anything more than $35/hour would have put you ahead. And you would've still had weekends, nights and vacation.

He just said that. Way to rub it in, bud.

Re: What I Wish I'd Known About Equity Before Joining a Unicorn

#529

Post by pinewurst »

foo101 wrote: post #519
pinewurst wrote: post #425

Earlier quoted context omitted.

8 years of weekends, late nights, holidays and vacation for a net of $200K after taxes? That's ~25K/year so if you would've worked a regular 40 hour week, 20 hours of contract work at anything more than $35/hour would have put you ahead. And you would've still had weekends, nights and vacation.

Can you explain the calculation to me? I am interested to understand the calculation so that I can perform similar calculations when I have two opportunities to choose from. superqd mentioned he would have made $300K more (i.e. in addition to the fixed salary he was earning) if he had bought the options. I assume that after paying for taxes, he would have still made $200K. Since he worked for 8 years, this is indeed…

The >$35/hour number is incremental pretax income on top of his base salary, not a replacement for it.

Re: What I Wish I'd Known About Equity Before Joining a Unicorn

#530

Post by mseebach »

rrhyne wrote: post #352
adventured wrote: post #273

Earlier quoted context omitted.

The chances of it getting through within the next few years, is 100%, in my opinion. There will be numerous opportunities to fix this particular problem, along with all the other items getting targeted when it comes to tax & regulation reform. It has wide bi-partisan support, and the tech industry is the largest lobbyist force on earth now, as such it'll be a matter of how soon rather than if.

One counter point... think about who is lobbying for changes. If it's primarily founders/executives at startups, know they do not stand to gain from removing these golden handcuffs. This bill will make turnover higher and hiring more expensive.

It's a double-edged sword. It also means that it will be easier to hire people away from the start-ups. Google/Facebook/Amazon, even Oracle, must be getting a lot of "nos" from start-up people who'd be interested, but are going to hold out for a year or two more (and who aren't quite valuable enough to buy out).
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