91–100 of 213 posts
It doesn't matter what percentage of a "seed company" I put, if it has a "low exit" (<$25M) I get $0... How is that possible?
"This simulation doesn't estimate taxation at all." Well, then it's misleading. Between AMT, capital gains / income tax, there's potential for a huge chunk of what you might earn to be removed.
Earlier quoted context omitted.
In the worst case, an option is going to be worth 0 and in the best case it's going to be worth > 0, so the value of an option is always positive until the company actually dies. Lottery tickets, unlike options, cost money up front. You still can't lose more than you pay, so the payoff curve is similarly non-linear, but unless you can trade options for cash options will always beat lottery tickets. Lottery tickets ar…
> In the worst case, an option is going to be worth 0 and in the best case it's going to be worth > 0, so the value of an option is always positive until the company actually dies. That's only true as long as you're still working at the company. If you leave, you have to exercise, and then the worst case becomes negative.
Yep, IMO unless you are a founder, if your company isn't one of the top companies of the decade your 4-6 years of pay-cut toil as an early employee will likely just not be worth it, at all. The expected value of working at an early startup gets overestimated, by a lot. If you're optimizing your career, either make the most you can at an established company, or start a startup. Or... work at an enlightened startup, th…
I completely disagree. It's really not hard to find a company with great product market fit, say series B, get a bunch of equity, a decent salary, and wait a couple years for your equity to be valuable. Assuming the company is successful (of course there's risk there, but by series B a lot has been mitigated), your equity will likely be quite valuable. I actually think, risk adjusted, that's the easiest way to make a…
I just wrote about this last week - https://medium.com/@CaseySoftware/tech-ipos-an-inside-out-vi... - after personally experiencing IPOs of both Twilio (joined post-B) and Okta (joined post-F).
Edit: Replaced the link to my site with the Medium post.
Earlier quoted context omitted.
I completely disagree. It's really not hard to find a company with great product market fit, say series B, get a bunch of equity, a decent salary, and wait a couple years for your equity to be valuable. Assuming the company is successful (of course there's risk there, but by series B a lot has been mitigated), your equity will likely be quite valuable. I actually think, risk adjusted, that's the easiest way to make a…
> Joining a series B startup and waiting a couple years is the easiest, risk adjusted way to make a bunch of money. Sorry, what?
Earlier quoted context omitted.
> my [startup] equity was worth about 50% of my salary each year. The equity of many AmaGooFaceSoft employees is also worth at least 50% of their yearly salary.
Yes but that's if I were to sell it after ~1 year at a company you've likely never heard of. If I wait 3 more and there's a large exit it could easily be worth millions.
Earlier quoted context omitted.
Do you have a convenient way to sell your startup equity after ~1 year? (i.e. before there's an exit)
There is a developed secondary market for venture-backed companies' stock. (Source: I do this.)
Earlier quoted context omitted.
This is especially true in this time where even successful companies drag their feet when it comes to IPO. If you don't think you can't afford to buy the options and pay the taxes (yes, there's taxes when exercising illiquid options), then you have to discount the chances of still being with the company at the time of a liquidity event. This means you can find yourself valuing stock options very little, even in cases…
> This is especially true in this time where even successful companies drag their feet when it comes to IPO. That's a very weird statement. Companies are under no obligation at all to ever offer stock to the public. An IPO comes with all kinds of downsides and many companies simply do not feel the benefits weigh heavier than the downsides. Such as: transparency, SOX, all kinds of restrictions and demands regarding co…
Earlier quoted context omitted.
> This is especially true in this time where even successful companies drag their feet when it comes to IPO. That's a very weird statement. Companies are under no obligation at all to ever offer stock to the public. An IPO comes with all kinds of downsides and many companies simply do not feel the benefits weigh heavier than the downsides. Such as: transparency, SOX, all kinds of restrictions and demands regarding co…
If they've taken VC funding, they most likely are.