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Bolt Financial's loans come due

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Re: Bolt Financial's loans come due

#151

Post by mbesto »

subsubzero wrote: post #88

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 puts an insane amount of risk on the employee

The market is what dictates this. You don't have to take a startup job.

Facebook, Google, etc. minted hundreds of millionaires when they IPO'd. It's hard for me to feel bad for people who take those risks.

I'd argue a whole lot of engineers should be much more judicious about joining startups and ask for more options. If engineers knew how to calculate startup risks better they'd probably know there is too much equity is concentrated to too few individuals (mainly founders).

Re: Bolt Financial's loans come due

#152

Post by mbesto »

s_dev wrote: post #104
greatpostman wrote: post #41

What people don’t know is the CEO Ryan Breslinlow founded the company that constructed the loans. He played both sides.

He's a founder -- NOT the CEO who is Maju Kuruvilla. Ryan might be CFO though so an executive.

His title says Chairmen. It's worse - he's ABOVE the CEO.

Re: Bolt Financial's loans come due

#153

Post by chris11 »

throwaway92394 wrote: post #149
chris11 wrote: post #148

Earlier quoted context omitted.

It's short term capital gains vs long term. If you don't exercise and just sell short term capital gains tax applies. If you exercise ISOs and hold long enough you pay AMT, which can be refundable, and LTCG when you sell the shares.

What happens if they waive the loan? Does it count as LTCG + the income tax on the loan amount?

I'm not sure what exactly would happen, but forgiven debt is usually taxable.

Re: Bolt Financial's loans come due

#154

Post by neetdeth »

bombcar wrote: post #83
Razengan wrote: post #73

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'd much rather have a (income tax marginal rate * loan amount) debt to pay than a (loan amount) one.

Depends on your ability to pay. In some cases a large debt to a corporation is far preferable to a small debt with the IRS.

Re: Bolt Financial's loans come due

#155

Post by subsubzero »

mbesto wrote: post #151
subsubzero wrote: post #88

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 puts an insane amount of risk on the employee The market is what dictates this. You don't have to take a startup job. Facebook, Google, etc. minted hundreds of millionaires when they IPO'd. It's hard for me to feel bad for people who take those risks. I'd argue a whole lot of engineers should be much more judicious about joining startups and ask for more options. If engineers knew how to calculate startup risks…

you pick two out of thousands! Google IPO'd so long ago that the rules regarding ISOs were different back then, strike prices could be arbitrarily lowered to whatever value the company wanted, not the maximum valuation as required by law now.

https://www.sec.gov/news/testimony/2006/ts090606cc.htm

Re: Bolt Financial's loans come due

#156

Post by lumost »

The tax benefits of options over RSUs are vastly overstated relative to the risks. At the end of the day, you're going to save ~15% on the total exercise through options compared to RSUs. That's 15% of what for many people may be a 5-10 year investment horizon.

The risk you take on as an employee with those options is much greater than 15%. If you have used loans to purchase the options, you have a substantial risk of being underwater.

It's time we callout options for what they are, a way for companies to protect their equity pool while being able to sell a story that the options are going to shoot through the moon.

Re: Bolt Financial's loans come due

#157

Post by Doctor_Fegg »

bogomipz wrote: post #68
nr2x wrote: post #5

Earlier quoted context omitted.

ceo gives off Jim Jones vibes.

Indeed. Someone linked this Forbes profile of him in a post yesterday: https://www.forbes.com/sites/stevenbertoni/2022/04/04/meet-t...

Wow. This is priceless. A longform recap of the infamous Dave Morin interview.

> After sunset, he avoids electric lights and screens because they disrupt his sleep. Instead, he lights candles and plays a buffalo-skin drum (he made it himself with the help of a local indigenous tribe) to wind down before bed.

Re: Bolt Financial's loans come due

#159

Post by ilamont »

Bolt Financial yesterday laid off one-third of its workforce, just months after raising $355 million in VC funding at nearly an $11 billion valuation.

Serious question: Does this company have a future? Does it have any value, either as a profit-generating venture or sold to an acquiring company?

Re: Bolt Financial's loans come due

#160

Post by FireBeyond »

Doctor_Fegg wrote: post #157
bogomipz wrote: post #68

Earlier quoted context omitted.

Indeed. Someone linked this Forbes profile of him in a post yesterday: https://www.forbes.com/sites/stevenbertoni/2022/04/04/meet-t...

Wow. This is priceless. A longform recap of the infamous Dave Morin interview. > After sunset, he avoids electric lights and screens because they disrupt his sleep. Instead, he lights candles and plays a buffalo-skin drum (he made it himself with the help of a local indigenous tribe) to wind down before bed.

Hah, yes. Every so often I still read this for a laugh:

https://jesuschristsiliconvalley-blog.tumblr.com/post/465392...

But yeah, oh boy, this guy took Dave Morin and said "Him. He's my role model."

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