161–170 of 204 posts
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I am not sure that is fair -- what if someone decided to buy out their vested shares with their own money? They would be screwed while those who borrowed from Bolt wouldn't be. It is just generally problematic.
I am willing to bet no one did this.
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 o…
Early exercise is a big play. You do it if you’re super early and super confident. You don’t have to. Pretty traditional if you’re early enough since it’s cheap.
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…
- If you join as an early employee, your strike price is minimal and this isn't a concern at all - If you want to minimize risk in return for higher taxes (call ~40%), just hold your ISOs and exercise-and-sell as a same-day sale when you're liquid (ie forgo the tax advantages of ISOs). There's absolutely no way for you to get screwed over if you're willing to take the gain as standard income.
> A Bolt spokesperson says that only a "single digit" number of laid-off employees took out the loans, despite more than 200 people losing their jobs, and that the aggregate amount was below $200,000. Moreover, she says the company plans to "work with" those individuals. If the amount was less than $200k, which is about the salary for a single employee these days, Bolt should just have annulled them entirely. The PR…
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My understanding is that Bolt lined up loans for employees to cover employees' tax burdens due to exercising their options. In simpler words: Bolt helped employees take out personally guaranteed loans to give Bolt money. In the loan terms, if the employee leaves for any reason, the employee owes Bolt the entire loan amount within 90 days of end of employment.
Doesn’t all this smell ENRON’ish?
This is why you should early exercise and file an 83B election whenever possible. Personally would avoid working at any startup that is in the awkward middle stage and would require you to shell out six figures just to exercise some questionable options especially now. Either join a very small company in the early stages where the valuation is still low or join a late stage or public company where you vest RSUs and d…
Sure, but this isn't realistic. Like you said, most people can't afford to exercise early. Even at a small company, most people don't have an extra $10k to gamble on a startup that may go nowhere. This is what Bolt was trying to solve. They did it the wrong way and hurt a lot of people, but they were trying to give people the opportunity to exercise early. The correct answer is a 10-year extended window. It's not per…
How would that work? Very few people stay in a tech job for 10 years. I stayed in a software job for 9 years, until I was laid off, and that's extremely unusual.
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> 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…
Employers cannot replace financial advice from an advisor with a fiduciary duty. Providing general education is good, and so is getting them free sessions with a financial advisor. But I don't totally agree they should be liable. This was an incredibly risky program, and I don't understand how Bolt was valued last year. But engineers were potentially sitting on a life changing amount of money. Not exercising could ha…
Unfortunately, they'll probably never be able to sell their shares for even a fraction of that amount anyway.
The first 5 engineers would be incredibly lucky if they got 0.1% - who knows how many of them fully vested and still have shares. I'm guessing less than half. There's MAYBE one person who was looking at close to $11M.
Engineers after that would be incredibly lucky to even get 0.01% of the company. That's $1.1M. Again - I'd be surprised if there's even 5 fully vested that still have shares.
And even if they still have the shares, they'll be lucky to sell them at a $2B valuation - let alone $11B. So cut those numbers by 1/5th (or more).
Bolt would've been a SCREAMING success for a startup. Unless you were engineer #1-5 - you'd be better off as an L4 at FAANG.
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Sure, but this isn't realistic. Like you said, most people can't afford to exercise early. Even at a small company, most people don't have an extra $10k to gamble on a startup that may go nowhere. This is what Bolt was trying to solve. They did it the wrong way and hurt a lot of people, but they were trying to give people the opportunity to exercise early. The correct answer is a 10-year extended window. It's not per…
> The correct answer is a 10-year extended window How would that work? Very few people stay in a tech job for 10 years. I stayed in a software job for 9 years, until I was laid off, and that's extremely unusual.
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No, and not just because it’s not a publicly traded security. They did nothing illegal. Maybe it should be but sadly it’s not.
> it’s not a publicly traded security FYI, this is irrelevant with respect to the SEC's jurisdiction [1]. [1] https://www.sec.gov/oiea/investor-alerts-bulletins/ib_privat...