Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Why I will not exercise my GitLab stock options

medium.com

Post reply on HN
Print view View original

161–170 of 211 posts

Re: Why I will not exercise my GitLab stock options

#161

Post by metaphorm »

hkmurakami wrote: post #47
nandemo wrote: post #38

Earlier quoted context omitted.

> These 15,000, or 0.0833% of the company, were available to him at $0.27/share, or $4,050 total. So he had the opportunity to buy 0.0833% of the company at a $4.8MM valuation. Given that they recently raised $20MM at an undefined valuation it really says something that he chose not to exercise the options. I normally don't comment on HN without having read TFA, but this one is way too long and I just skimmed over it…

A $20MM raise suggests a $100M valuation or so. That's a 20x increase in the stock price. OP's outlay would be something like $4000 + $35000 (state tax + short term capital gains. Less depending on how he hits AMT.). I don't think that's trivial, even if I'm off by a factor of 2.

I think you're on the mark here. the capital gains tax liability from buying those shares would be significant, and possibly unaffordable since the shares are not liquid at the moment.

Re: Why I will not exercise my GitLab stock options

#162

Post by dang »

simlevesque wrote: post #80

Please resist commenting about how something is boring.

urda was quoting the site guidelines, because the GP had broken them.

https://news.ycombinator.com/newsguidelines.html

We detached this comment from https://news.ycombinator.com/item?id=14038415 and marked it off-topic.

Re: Why I will not exercise my GitLab stock options

#163

Post by dang »

RamshackleJ wrote: post #100
AvenueIngres wrote: post #84

Earlier quoted context omitted.

CEO stalking employees, nothing to see here... When did this become ok?

It became ok when emotionally frail tech CEO's needed to cope with nagging existential fears of _not_ actually making the world a better place, while at the same time frantically trying to succeed so that they won't be left with the horrific ignominy of not being successful _and_ making the world worse.

Please don't use rant rhetoric here. It's bad for substantive discussion.

Re: Why I will not exercise my GitLab stock options

#164

Post by cpncrunch »

6stringmerc wrote: post #142
cpncrunch wrote: post #122

Earlier quoted context omitted.

>One of the major takeaways for me from this article was about how sincere feedback and contributions to the company can be so quickly brushed aside. I didn't see that from the gitlab comments. It just looks like a technical discussion where his colleagues disagreed with his analysis.

My bad for not being more clear - there's a specific part in the article (I highlighted on Medium) that stated this: > I was in charge of hiring them, so I went to great lengths to make sure my team consisted of the best possible people, with great engineering skills. You would imagine my concern and indignation when the CEO decided that the Service Engineers were to handle not just our increasingly demanding enterpr…

It's hard to really understand what was going on from this. How exactly did he voice his opinions, and how did the company respond? From the only evidence given (the gitlab comments), he seems to be overblowing things somewhat.

Re: Why I will not exercise my GitLab stock options

#165

Post by chrdlu »

lutorm wrote: post #83
chrdlu wrote: post #60

Earlier quoted context omitted.

As elastic_church mentioned below, the firm I work for (The Employee Stock Option Fund: https://employeestockoptions.com ) could help fund the exercise and help cover potential taxes. We aim to give employees upside in the startup without them having to invest their own money.

In exchange for what cut? I looked all over your web page without seeing a number.

Each deal is custom tailored to the optionee. As you can imagine, some people have higher strike prices than others and as a result, the economics of the deal would change. We typically aim to take a minority position because we want our counterparty to have a vested interest in the shares.

Re: Why I will not exercise my GitLab stock options

#166

Post by chrdlu »

a_t48 wrote: post #92
chrdlu wrote: post #60

Earlier quoted context omitted.

As elastic_church mentioned below, the firm I work for (The Employee Stock Option Fund: https://employeestockoptions.com ) could help fund the exercise and help cover potential taxes. We aim to give employees upside in the startup without them having to invest their own money.

What is your firm's angle in this? Do you take a cut of sales if\when the stock sells? I've some options that I have to act on within a month or two, but I don't think they qualify (company is kind of in the twilight zone - founded >10 years ago, but not publically traded).

We take a percentage of the future proceeds (which gives us upside in the startup). You may be surprised, a lot of companies are taking >10 years to IPO including Mulesoft. Feel free to send me an email at chris@esofund.com and we can chat!

Re: Why I will not exercise my GitLab stock options

#167

Post by 6stringmerc »

cpncrunch wrote: post #164
6stringmerc wrote: post #142

Earlier quoted context omitted.

My bad for not being more clear - there's a specific part in the article (I highlighted on Medium) that stated this: > I was in charge of hiring them, so I went to great lengths to make sure my team consisted of the best possible people, with great engineering skills. You would imagine my concern and indignation when the CEO decided that the Service Engineers were to handle not just our increasingly demanding enterpr…

It's hard to really understand what was going on from this. How exactly did he voice his opinions, and how did the company respond? From the only evidence given (the gitlab comments), he seems to be overblowing things somewhat.

Counter-Point, never having a voice until "The Bobs" show up and do some "consulting" a la Office Space.

>...So that means that when I make a mistake, I have eight different people coming by to tell me about it. That's my only real motivation is not to be hassled, that and the fear of losing my job. But you know, Bob, that will only make someone work just hard enough not to get fired.

Post Script: Not Everybody Can Afford to Jerry McGuire Out A Gig. This essay? Closer and more real than most claim to be.

Re: Why I will not exercise my GitLab stock options

#168

Post by phlo »

winteriscoming wrote: post #157

The article states he received those options as a contractor. Is this common? I was under the impression that only employees are entitled to stock options. If it's possible to get these options as a contractor, what really differentiates the two practically?

Using what information one can gather from their salary calculator [1, 2], the distinction seems to be mostly related to the staffer's location. Staff from US, UK, NL, IN, CN, BE are hired as employees (with a salary multiple ranging from 0.66 to 1.00) of Gitlab Inc., while staff from all other locations is hired as contractors of Gitlab B.V., using a multiple of 1.17 (probably to make up for the lack of employee benefits).

I have no relation to Gitlab other than having had a look at some of their job postings, so please do take this information with a grain of salt. Happy to have someone more familiar with the details correct any mistakes.

[1] visible on many job ads, like https://about.gitlab.com/jobs/security-specialist/ [2] salary data is at https://about.gitlab.com/salary/data.json

Re: Why I will not exercise my GitLab stock options

#169

Post by arjie »

atishd wrote: post #158
EpicEng wrote: post #95

Earlier quoted context omitted.

I've looked into exactly this arrangement before. I couldn't find anything definitive, but I imagine that the second buyer will be in a very risky situation should the shareholder decide to break the contract down the road.

beware: https://www.sec.gov/news/pressrelease/2016-257.html

That seems to just be a regulatory operation they didn't fulfill. They were supposed to register the swaps and they didn't.

Is that accurate or was there something nefarious going on?

Re: Why I will not exercise my GitLab stock options

#170

Post by exclusiv »

will_hughes wrote: post #155
exclusiv wrote: post #85

Earlier quoted context omitted.

It was a fair request to have a key member link to GitLab. Employees can be told what to do. You don't have to comply, but when you get a fair request and you make a big deal of it - you have to be prepared for the consequences. Contractors - no you can't do that stuff; you can't tell them when or how to work... they have a lot of protections. The CEO request to change the link wasn't unreasonable. Why would a CEO wa…

> It was a fair request to have a key member link to GitLab. This leads to situations like what Microsoft used to be (and perhaps still is) - that Everything Had To Be IE And Bing. There could be no acknowledgement of the other brand by name. > Employees can be told what to do. On company time, certainly. When representing the company, for sure. Even perhaps if it's sufficiently controversial where you're bringing th…

It was a fair request. If you're CEO you try to rally your people. It wasn't a demand. The author had no reason to be stubborn about it. There were obviously other areas to be concerned about as I sided with the author on, but this wasn't one of them and it derails from the other arguments.
Post reply on HN