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Startup Stock Options – Why a Good Deal Has Gone Bad

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Re: Startup Stock Options – Why a Good Deal Has Gone Bad

#331

Post by blackflame7000 »

MobileVet wrote: post #301

I was part of a very well know incubator and a very early employee at a flagship company. Founder blew tons of cash and dilutions but that is part of it and I didn’t mind. What was ethically shady was shortly after I left with 4yrs vested they decided to restructure the entire company so they could attract investment. They took all the debt from the original company and put that in a shell company that then owned a p…

That happened to me too. Owner restructuring companies or moving from LLC to LLC and then starting the vesting schedule over again. It's fairly common it seems that owners play games with the people who actually build the company after the work is done.

Re: Startup Stock Options – Why a Good Deal Has Gone Bad

#332

Post by throw03172019 »

MobileVet wrote: post #301

I was part of a very well know incubator and a very early employee at a flagship company. Founder blew tons of cash and dilutions but that is part of it and I didn’t mind. What was ethically shady was shortly after I left with 4yrs vested they decided to restructure the entire company so they could attract investment. They took all the debt from the original company and put that in a shell company that then owned a p…

I went through an acquisition with a medium sized buyer who later restructured the company making the common stock essentially worthless. However, we were offered to buy the new stock class to equate to what we had before for a nominal fee (we already finished earn out and we’re gone for 2 years).

Re: Startup Stock Options – Why a Good Deal Has Gone Bad

#333

Post by samstave »

MobileVet wrote: post #301

I was part of a very well know incubator and a very early employee at a flagship company. Founder blew tons of cash and dilutions but that is part of it and I didn’t mind. What was ethically shady was shortly after I left with 4yrs vested they decided to restructure the entire company so they could attract investment. They took all the debt from the original company and put that in a shell company that then owned a p…

I personally fucking hate that such shenangans be shielded and we dont know who the culprits are in such.

Ill lay it out there: fuck lockheed martin. Fuck solyndra.

You assholes need to be brought to task for raping so many people.

You should be calling these “corporations” out. They arent some abstract concept, they are people.

Look at theranos. Fuck her.

Seriously folks have the balls to stand up against companies that are shady.

Re: Startup Stock Options – Why a Good Deal Has Gone Bad

#334

Post by martin_ »

deanmoriarty wrote: post #292
martin_ wrote: post #291

Earlier quoted context omitted.

My CPA said the maximum I can do is $3,000/year, I'm also in CA :)

mmm, as far as I know $3,000/year is the maximum capital loss (from schedule D) that you can claim against your income. But that has nothing to do with your AMT tax credit, which you should have generated the year you exercised ISOs (form 8801). The AMT tax credit you can use every year should be limited to the difference between your regular income tax and AMT income tax each and every year (if positive). You keep g…

Thanks so much for this info! I'll look into it!

Re: Startup Stock Options – Why a Good Deal Has Gone Bad

#335

Post by gwbas1c »

I joined a company where my offer letter had two salary options: A higher salary with less stock, or a lower salary with higher stock. (It wasn't a very large difference.)

About a year later, we were sold, and the payout from the stock did not justify the salary difference. In order to justify the difference, the payout needed to be about 20x.

When I confronted the CEO she just changed the subject, and didn't understand why I stopped keeping it a secret that I was looking for another job.

Re: Startup Stock Options – Why a Good Deal Has Gone Bad

#336

Post by atomical »

gwbas1c wrote: post #335

I joined a company where my offer letter had two salary options: A higher salary with less stock, or a lower salary with higher stock. (It wasn't a very large difference.) About a year later, we were sold, and the payout from the stock did not justify the salary difference. In order to justify the difference, the payout needed to be about 20x. When I confronted the CEO she just changed the subject, and didn't underst…

Why do you fault her for selling?

Re: Startup Stock Options – Why a Good Deal Has Gone Bad

#337

Post by mikekchar »

kabdib wrote: post #183

I made a bunch of money from ISOs at large, established companies. I made zero (well, negative, really) from startup stock options, even before things got really shifty in the 2000s. One startup that I left, that is now a billion dollar company, simply decided to "extinguish" the shares I bought a few years after I resigned. I was probably cheated, but it's not worth the effort to go after them and they know it. Trea…

On the other hand, I once worked for a large well known company that actually gave me a pension. I can't remember what it was, but I think something like 5-10% of my total compensation went into this pension plan, which was essentially a mutual fund (although you could opt for long stock in the actual company instead). It took 3 years to fully vest. I stayed 5. When I left they sent me a letter literally saying that they thought the cost for me to hire a lawyer to get my money back would be more than the amount of money I could retrieve so they were going to keep the money. By that time I was already so annoyed with them that I concluded they were right: it wasn't worth my effort to extract a few tens of thousands of dollars from them (hey, this was a long time ago -- salaries were a lot smaller then ;-) ). Six months later the company dissolved under allegations of accounting fraud. The upper management actually got the bankruptcy court to allow them to use the entire pension fund as "retention bonuses" so that the company would have a chance of succeeding under their illustrious reign. That was an eye-opener. I had a few friends who had worked there for 20 odd years and were counting on that pension. Eventually I think they were able to sue the bankrupt company to get a portion of the money back. Of course, none of the fraud allegations went to court and the executives retained their retention bonuses (after having done nothing to save the company).

Re: Startup Stock Options – Why a Good Deal Has Gone Bad

#338

Post by danans »

drstewart wrote: post #214
ryanSrich wrote: post #152

Earlier quoted context omitted.

> Work / life balance Disagree here for one specific type of startup...remote (which I know you mentioned). Here's an example day at BigCorp: - Rise and shine at 5am to work out early enough - Leave the house by 7am - 1+ hour commute into work - Start work at 8am - Stay until 8pm - Get on/in the car, train, bus for a 1+ hour commute home - Late dinner around 9pm - Veg out because you're exhausted and go to bed by 11p…

What an absolutely ridiculous strawman. Anyone can come up with lopsided scenarios to make one seem better than the other. Here's an example day at BigCorp: - Rise at 9am because standup isn't until 10am - 10 minute commute since you're paid well enough to live near the office - Arrive at work at 10am - 1 hour lunch break at 12pm - Leave work early at 4pm to miss the gym rush - Get home by 6pm, enjoy the rest of the…

You can have an unhealthy work life balance in any job, whether on site or remote.

Some of that is undoubtedly controlled by the job itself, but some is usually also controlled by you and the boundaries you choose to set for your job.

Re: Startup Stock Options – Why a Good Deal Has Gone Bad

#339

Post by sjg007 »

rottencupcakes wrote: post #304
MobileVet wrote: post #301

I was part of a very well know incubator and a very early employee at a flagship company. Founder blew tons of cash and dilutions but that is part of it and I didn’t mind. What was ethically shady was shortly after I left with 4yrs vested they decided to restructure the entire company so they could attract investment. They took all the debt from the original company and put that in a shell company that then owned a p…

Curious why you don't mention their name? Feels like there's little recourse against this sort of thing other than reputation risk, why not out them publically?

it's all public info... fuckedcompany 2.0

Re: Startup Stock Options – Why a Good Deal Has Gone Bad

#340

Post by anonytrary »

blackflame7000 wrote: post #331
MobileVet wrote: post #301

I was part of a very well know incubator and a very early employee at a flagship company. Founder blew tons of cash and dilutions but that is part of it and I didn’t mind. What was ethically shady was shortly after I left with 4yrs vested they decided to restructure the entire company so they could attract investment. They took all the debt from the original company and put that in a shell company that then owned a p…

That happened to me too. Owner restructuring companies or moving from LLC to LLC and then starting the vesting schedule over again. It's fairly common it seems that owners play games with the people who actually build the company after the work is done.

Is that illegal? Sounds pretty illegal. I'd imagine the owner getting sued by his employees.
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