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How I sold my stock options

segah.me

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Re: How I sold my stock options

#41

Post by paulsutter »

dotBen wrote: post #17

Couple of thoughts as a founder and investor: 1) The company is disincentivized to help you sell your stock/options because it will create a new valuation of common stock. Companies use the lure of a low 409a to attract employees, especially savvy executives, with equity packages. Doing anything to set a higher future strike price is not in their interest. 2) Your NDA almost certainly prohibits you from communicating…

> Overall: this is really a firesale approach...It’s almost certainly never worth trying to sell pre-exit

You advice was great up until this bit, at which point you are completely wrong.

The best time to sell shares is on an up round. There will be people who didn’t get in who want to. It’s perfectly common that they’re underallocated to a company that you’re overallocated. That’s not a fire sale it’s just a deal that make sense.

Re: How I sold my stock options

#42

Post by Kiro »

dotBen wrote: post #17

Couple of thoughts as a founder and investor: 1) The company is disincentivized to help you sell your stock/options because it will create a new valuation of common stock. Companies use the lure of a low 409a to attract employees, especially savvy executives, with equity packages. Doing anything to set a higher future strike price is not in their interest. 2) Your NDA almost certainly prohibits you from communicating…

> Some specialist secondary VC firms exist

Do you have any names or links?

Re: How I sold my stock options

#43

Post by aorloff »

Kiro wrote: post #42
dotBen wrote: post #17

Couple of thoughts as a founder and investor: 1) The company is disincentivized to help you sell your stock/options because it will create a new valuation of common stock. Companies use the lure of a low 409a to attract employees, especially savvy executives, with equity packages. Doing anything to set a higher future strike price is not in their interest. 2) Your NDA almost certainly prohibits you from communicating…

> Some specialist secondary VC firms exist Do you have any names or links?

You might start here :

- EB Exchange

- Emerson Equity

- ESO Fund

Re: How I sold my stock options

#45

Post by hb3b »

dotBen wrote: post #17

Couple of thoughts as a founder and investor: 1) The company is disincentivized to help you sell your stock/options because it will create a new valuation of common stock. Companies use the lure of a low 409a to attract employees, especially savvy executives, with equity packages. Doing anything to set a higher future strike price is not in their interest. 2) Your NDA almost certainly prohibits you from communicating…

Can anyone advise on which documents would be worth requesting under Delaware company shareholder rights to help assess stock value?

Re: How I sold my stock options

#46

Post by garmaine »

gesman wrote: post #16

Generic “obvious wisdom” type of article rather then specific actionable steps. Apologies, but it leaves reader with the main question unanswered - how?

There's a procedure in your restricted stock contract. Follow it.

Finding the investor to buy, and getting the company to go along are the harder tasks, and the OP covers those.

Re: How I sold my stock options

#48

Post by gesman »

garmaine wrote: post #46
gesman wrote: post #16

Generic “obvious wisdom” type of article rather then specific actionable steps. Apologies, but it leaves reader with the main question unanswered - how?

There's a procedure in your restricted stock contract. Follow it. Finding the investor to buy, and getting the company to go along are the harder tasks, and the OP covers those.

Luckily I don't have any right now that requires seeking of alternative venues.

Any restricted option holder however might benefit from insights and potentials that could of been provided by secondary marketplaces.

Re: How I sold my stock options

#49

Post by lasgsf »

mrgordon wrote: post #40
lasgsf wrote: post #30

Earlier quoted context omitted.

Yup that is what equidate does. Basically a forward contract on the underlying shares. I have done this with some AirBnB shares.

How was the experience overall?

Overall was pretty easy and painless. In general I pretty feel good about it as they mention that the underlying principle is backed by insurance so if the counterparty does not transfer shares over you can get your principal back in theory.

Re: How I sold my stock options

#50

Post by lasgsf »

JumpCrisscross wrote: post #37
toomuchtodo wrote: post #26

Earlier quoted context omitted.

Apologies, I overcomplicated it. Someone lends you money to exercise your options, you pay them back (at IPO or acquisition) as well as additional compensation for their risk of your shares being worthless.

> Someone lends you money to exercise your options, you pay them back (at IPO or acquisition) There is a lot of uncertainty about whether these loan-and-pretend or forward structures violate the spirit of one’s stock option contract, which can and has resulted in forfeiture, and if it involves creating an off-exchange securities swap, illegal since Dodd Frank for non-qualified participants. It was receiving regulator…

How would that invalidate the option contract? As far as the company is aware the option was exercised under the employee name and stays that way indefinitely till an IPO event.

Post-IPO the shares are prob deposited in Computershare and as a shareholder you can transfer it to anyone you want.

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