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TLDR Stock Options

tldroptions.io

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Re: TLDR Stock Options

#191

Post by wtvanhest »

wtvanhest wrote: post #139
mahyarm wrote: post #110

Earlier quoted context omitted.

It might be part of the reason why you tend to see older people in bigco and younger people in startup co.

I actually think the biggest reason is that start ups need an army of really good individual contributors. They dont need managers or leaders until they scale. At that point, the speed is too fast for experienced people to just enter so young people become managers. And young people dont want to manage people older than them. Bias continues.

Just curious why the downvotes?

Re: TLDR Stock Options

#192

Post by dllthomas »

Yizahi wrote: post #183
dllthomas wrote: post #182

Earlier quoted context omitted.

I don't claim that there's legal obligation. I don't claim that there isn't, but I'm not sure where it'd arise from.

It was a joke, modified from the recent NSA joke that "NSA only breaks the spirit of the law" :) I certainly didn't intent any offense.

> I certainly didn't intent any offense.

None was taken :)

Re: TLDR Stock Options

#193

Post by seattle_spring »

anorwell wrote: post #37
bumbledraven wrote: post #33

From a purely monetary and risk-based viewpoint, whether to join a start-up depends on how much money you already have. Suppose you regard tldroptions.io's probability distributions and outcomes as correct, and the only thing you care about is maximizing the long-term rate of goal of your capital. Then the Kelly Criterion ( https://en.wikipedia.org/wiki/Kelly_criterion , a.k.a. Fortune's Formula) says that you should…

1% equity in a series C startup sounds wildly optimistic. You would most likely not get that much equity as a senior software engineer. It's interesting that your first calculation still favours the other choice.

On the other side though, $100k salary is widely pessimistic for a Series C employee who could command $300k total compensation at a FANG-type company. Realistically, their base salary would be closer to $150k - $180k.

Re: TLDR Stock Options

#194

Post by iamacynic »

brianwawok wrote: post #111
romanovcode wrote: post #53

Earlier quoted context omitted.

Yeah, I agree. No way someone in C round will get 1%.

A C-suite would I think, not an engineer.

a c-suite would get more than that, probably closer to 3 or 5%, and also a signing bonus, as well as performance bonuses, a huge options package, and a termination clause / parachute clause. hell, throw in a relocation package and a credit card for entertaining customers and partners also.

Re: TLDR Stock Options

#197

Post by benmathes »

Hi Eric, Tiho, Marcus, etc.

This is a fantastic start. Yes, angel.co/clear was complicated. I hope you have better luck driving adoption.

What you are charting at the top is the company exit value. But the UI controls enter info tied to the employee. You should chart the employee's exit value.

You should also put the "or not*" controls as totally optional toggles as an exploratory UI. I.e. the user can toggle "preference" and see what it does to their value.

Re: TLDR Stock Options

#198

Post by htormey »

limelight wrote: post #154
johnny99 wrote: post #14

This is fantastically useful both as a side-of-the-barn estimator, and a teaching tool. Thanks! Two things a lot of startup employees are unaware of that are worth highlighting: they actually have to buy their options, which eats into returns, and that if they leave the company they have a limited window (30 days, typically) in which to do so. In would behoove them to save/plan for this fact.

> they actually have to buy their options Yup. It honestly astounds me how many people don't factor this into their decision-making. Your only equity compensation on joining is the delta between your strike price and the current market value of your stock. This is often very little, far less than you give up in salary at many companies.

Yep. This is a very important point. If you are experienced and planning on joining a startup try to negotiate for early exercise or a very long exercise window for your options. Either that or be prepared for a nasty bill if you ever decide to leave and the start up is doing well.

Re: TLDR Stock Options

#199

Post by bethly »

robomc wrote: post #167
limelight wrote: post #154

Earlier quoted context omitted.

> they actually have to buy their options Yup. It honestly astounds me how many people don't factor this into their decision-making. Your only equity compensation on joining is the delta between your strike price and the current market value of your stock. This is often very little, far less than you give up in salary at many companies.

How does this tool help you work that out though.

This tool reflects that profit by assuming a current strike price based on average valuation changes between rounds. Instead of saying that you get the full value of the stock you buy, the calculation takes into account that you also have to purchase the stock.

This tool doesn't explain the dynamics going into the estimated profits (though it links to things that do), but it helps people avoid over-estimating the value by missing dynamics like strike price.

Re: TLDR Stock Options

#200

Post by roguecoder »

wtvanhest wrote: post #191
wtvanhest wrote: post #139

Earlier quoted context omitted.

I actually think the biggest reason is that start ups need an army of really good individual contributors. They dont need managers or leaders until they scale. At that point, the speed is too fast for experienced people to just enter so young people become managers. And young people dont want to manage people older than them. Bias continues.

Just curious why the downvotes?

You offer no particular evidence for your claims, they are unpersuasive and you manage to insult both older and younger employees in the space of three sentences.

A. You assume young people are "really good individual contributors" and older people aren't, which is very often exactly backwards.

B. It has been my experience that startups often hire people with management experience as they scale.

C. Your assertion that young people don't want to manage old people is unsupported and pretty much just sounds bitter.

The original hypothesis that younger developers are more likely to be overconfident about their chances of success and so are willing to accept lower effective pay makes way more sense than that older developers are less good at being individual contributors.

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