131–140 of 204 posts
Earlier quoted context omitted.
Kind of a shame that yet another one of the few startups pushing for a four day work week turns out to be run by incompetents (Treehouse), and another founder who challenges the VC establishment turns out to be a two-faced charlatan (Basecamp).
Not to derail this thread but what’s two faced and charlatan about JF/DHH? Or are you referring to someone else?
Earlier quoted context omitted.
> Bolt should just have annulled them entirely These loans were made cashlessly as part of an early option exercise. That is steeped deeply in the internal revenue code. The forgiven principal would be at the very least income. Then the tax benefits from the early exercise would retroactively apply with penalties and interest. All of this assuming the IRS doesn't view the move as a heads I win (if the company does we…
Why would employees exercise prior to departing and/or with no exit in sight?
Or it's last year, and an employee wants to lock in the FMV for AMT before the next round/IPO.
It's definitely an aggressive move, but I can understand why someone would exercise.
I remember interviewing with them about 2-3 years ago. Everyone seemed very enthused, but no one was able to clearly articulate for me what it was that made their product/offerings different. Glad I dodged that bullet
Earlier quoted context omitted.
> Bolt should just have annulled them entirely These loans were made cashlessly as part of an early option exercise. That is steeped deeply in the internal revenue code. The forgiven principal would be at the very least income. Then the tax benefits from the early exercise would retroactively apply with penalties and interest. All of this assuming the IRS doesn't view the move as a heads I win (if the company does we…
Why would employees exercise prior to departing and/or with no exit in sight?
Boy do I hate how ISO options are treated by the IRS for startup employees. It puts an insane amount of risk on the employee in both coming up with the cash to exercise(bolt offered loans for this part) and then the worst part, being taxed on unrealized gains. The latter to me seems completely against how the rest of the tax code when it comes to stock based assets. And it leaves employees who are not well informed o…
It would probably make good outcomes less good (companies would probably grant fewer options, or instead grant RSUs) but a much better mean?
Earlier quoted context omitted.
For what? This thread is full of misunderstandings. What is it you think Bolt did that the SEC should pursue them for? If it’s alleged they fraudulently hid risks, etc., it’s one thing, but so far all that seems to have occurred is they offered something that has pros/cons, disclosed risks, half wanted to take the risk for the pros, and in hindsight, perhaps it was a bad deal since valuations are tanking industry wid…
> what is it you think Bolt did that the SEC should pursue them for? Bolt offered, with multiple conflicts of interest, what are essentially margin loans to potentially unsophisticated borrowers. The $300 credit for a financial advisor the CEO tweeted about should, alone, be presumptive. To be clear, I don't think anyone did anything intentionally wrong. (Also, I learned about this yesterday, so there’s that.) But wa…
The company tried to do something beneficial for its employees, although perhaps it was misguided. They gained nothing here except the marketing benefit of trying to be employee friendly.
Margin loans are risky because you can get liquidated and lose your other principal. This was a cashless loan, that was only 50% recourse, so the only risk is that you may have to pay back half of what you bought the stock at if it ends up worthless.
I don’t think there was any incompetence or negligence here, and even if there was some incompetence, that’s not a theory of liability.
Earlier quoted context omitted.
>>I'm somewhat blown away by this whole thing. Leverage to finance an already-leveraged derivatives position on illiquid stock. From the issuer of said stock. Who is also the borrower's employee. That's both risky and dodgy! It's risky, but not necessarily dodgy. Many employers do not even permit early exercise and I wish more did as I could have substantially reduced my tax burden in some situations. Taking loans fo…
"Taking loans for early exercise is risky, but ultimately, we're adults who are responsible for our own decisions." Yes, agree. If the situation was reversed and these employees made money from their investment no one would be complaining. My guess is overall Bolt was actually being nice to their employees and allowing them to get in early on the action (i might be wrong but i've been in similar situations and usuall…
But I'm not sure how Bolt significantly benefit financially from this program. And $200k is not a ton of money for a unicorn. If you're an early employee at a unicorn you can work with 3rd parties to make more aggressive financial decisions.
Earlier quoted context omitted.
If the company was growing rapidly, then maybe 33% of the workforce hadn’t vested yet?
Yeah, if they laid off new folks who started less than a year ago, none of those people would have vested. And in a rapidly growing company, the new hires can be a big portion of the company.
Earlier quoted context omitted.
Can someone please ELI5 the parent comment?
Stock options (sometimes?) have an exercise date. If you don't exercise by that date, you give up on the options. But some of them would incur a tax liability at option exercising (the IRS values the "gain" at "stock price - option exercise price" and I believe now causes mark to market at the exercise time?) which would need to be paid also. Bolt offered to loan people money to exercise their options (and pay the ta…
I understand why the employees would want a loan - they need money to buy the shares required to exercise the loan - and I guess they can't do it through a normal broker?
If the employees Exercise-to-sell-to-cover or Exercise-to-sell they should be fine right because they would have closed the loan? This would explain why so many took the loan but so few of the layoffs were affected.
Is the only issue the ones that didn't Exercise-to-sell? I understand that tax will need to be paid but I'm not sure what benefit they'd have would be?
Unless, its because the capital gains + loan rate < income tax?
Imagine if getting fired and immediately owing a vast sum of money to your employer became a common practice at most companies. Might lead the way to higher levels of employee retention and may be seen as some kind of solution to people not doing their jobs or doing the bare minimum just for a paycheck, especially in undesirable but necessary jobs.
It's disgusting as hell so yes, I wouldn't be surprised to see it in the next few years. Maybe when you start your new job, you have to pay them a $10k deposit, which will "vest" back to you over the next four years; quit early and it's gone!