TLDR Stock Options • Hacker News Board

Re: TLDR Stock Options

#211

Post by softawre » Mon, Jun 05, 2017, 2:27 PM UTC

vacri wrote: post #106

orthoganol wrote: post #39

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…

> If you're optimizing your career, either make the most you can at an established company, or start a startup. I feel I'm optimising my career, working as a sysadmin at a small startup. It's not optimising for money, but I get to touch a lot of tech and design a lot of infrastructure. Make a few mistakes and learn from them. I'm not implementing someone else's design here.

But who are you learning from? Is there a senior sysadmin at the startup? Mentorship matters.

Re: TLDR Stock Options

#212

Post by scosman » Mon, Jun 05, 2017, 6:00 PM UTC

RonanTheGrey wrote: post #150

scosman wrote: post #81

Correct me if I'm wrong, but this seems to be assuming a seed round valuation of $40 million (it's returning $0 unless the exit is > $40m). That's absurd. Edit: the assumption of 0.01% is also absurd. A simplified calculator should include reasonable defaults. This is like a mortgage calculator called tldrCanYouAffordAHouse.com that assumes 25% interest rates and doesn't disclose that.

Why is the assumption of 0.01% absurd? From what I have seen, that's exactly what an early employee can expect. 10% of the available stock gets split between the early employees, most of which (9%) goes to the founders/c-suite. The other 90% is reserved for investors, of which the founder(s) may be one. If you have 100 employees by the time you exit, and 1% of the stock was divided among them (exactly the situation w…

That's not correct. The founders already have stock before any round. They typically don't get any of the ESOP. In early rounds the ESOP is essentially carved out of the founders stock, it doesn't make sense to give some of it to them (just negotiate a smaller ESOP). Also, founders are not considered investors in the sense you mention (different stock classes).

Secondly "by the time you exit" isn't relevant. Your stock is setup by when you join. If you join a company with 100 people, sure you get less. But 0.01% for Seed/A isn't even close. If that's what you get offered, don't take it.

Re: TLDR Stock Options

#213

Post by adamdonahue » Tue, Jun 06, 2017, 4:27 PM UTC

I'm having trouble grokking the results here. If I put in 50 basis points for a seed-funded company it calculates as no return until a $40M exit. I'd like to see the justification for this.