First employee hired at a startup. Paid for my options before leaving the company. Six months later the company was acquihired by Google. Three months after that I was given paperwork informing me that those shares are now worth exactly $0.00/each. Founders made out well enough from the deal to pick up high-end luxury sports cars though, which is the important part of an exit, right?
Poll: How much did you earn from your stock options during exit?
51–60 of 191 posts
Re: Poll: How much did you earn from your stock options during exit?
#52Proud non-profit hacker.
Re: Poll: How much did you earn from your stock options during exit?
#53You'd have to be pretty dumb to be an employee at a startup because of the money: bad hours, lots of risk, bad pay and lots of personal confrontation.
exactly!
You take almost as much risk and work just as many hours as when you work for yourself. Except you own very little in equity (as a developer, usually less than 10%) and you have no control over what happens with the company (usually when VC takes over, they will be trying to make an ROI asap at the expense of any long-term plans).
Re: Poll: How much did you earn from your stock options during exit?
#54Earlier quoted context omitted.
It's my opinion. Working at a startup, you're underpaid and overworked for very little financial benefit.
Ill second that - skip the startups and work for yourself instead if at all possible
I have friends who love startups but would never start one. It's not for everyone.
Re: Poll: How much did you earn from your stock options during exit?
#55I voted three times...but this is missing a negative entry - you know, the scenario where you pay an obscene amount of taxes on the ridiculously inflated price of your shares when you exercise (and can't sell yet while awaiting a liquidity event), but the shares are later downgraded to 1/10th taxable estimate...so you get to hold on to that loss for years, hoping at some point to be able to be in the position to writ…
Or even worse exercise your options when the company goes public but do not sell the stock. Watch the stock plummet to less than a dollar. Now you have a big tax liability and no way to pay it off!
Re: Poll: How much did you earn from your stock options during exit?
#56First employee hired at a startup. Paid for my options before leaving the company. Six months later the company was acquihired by Google. Three months after that I was given paperwork informing me that those shares are now worth exactly $0.00/each. Founders made out well enough from the deal to pick up high-end luxury sports cars though, which is the important part of an exit, right?
Maybe you should let us know what the startup was, as well as the people behind it, so we can avoid working with them.
Re: Poll: How much did you earn from your stock options during exit?
#57I voted three times...but this is missing a negative entry - you know, the scenario where you pay an obscene amount of taxes on the ridiculously inflated price of your shares when you exercise (and can't sell yet while awaiting a liquidity event), but the shares are later downgraded to 1/10th taxable estimate...so you get to hold on to that loss for years, hoping at some point to be able to be in the position to writ…
Agreed, there should be a 'I'm writing of $3,000 a year" option. I had a lot of room to cover gains by that for a while.
But its an area where tax law has changed a bit so its useful to check with your accountant to see if you can write off gains on current stock against previously realized losses. That way you get to keep more of the money from selling the current stock. Exercises are still regular income (grrrrr!) but gains on like investments (stock for stock) are generally offsetable. Check with your accountant.
Re: Poll: How much did you earn from your stock options during exit?
#58When the company was wound down, the VCs got back a significant amount (I think it was somewhere between 1x and 2x original investment, closer to 1x). The employees who had stock or options got zero.
Re: Poll: How much did you earn from your stock options during exit?
#59Wow...I have a whole new appreciation for how unbelievably lucky I got. Never even worked in Silicon Valley and had multiple exits that were, judging from this poll data, quite anomalous. Even when I was the employee.
When I started out I had no clue about exits or options or any of it. It was just another number on my offer letter. I took the job because I wanted to learn and do some fun graphics programming. It really is a Christmas miracle that I was able to do that and not even live in San Fran.
Based on my experience, I would say a good number of the votes you see represent pure, dumb, luck. Without question my votes do. Maybe some people were able to steer themselves to those exits, but for many, I'm betting they just got lucky as well.
This data is really only showing you the likelihood of getting lucky. It is better than anywhere else in the economy. But it is not something that you should plan on. I think that is the "take-away" as the business guys would say.
Re: Poll: How much did you earn from your stock options during exit?
#60Earlier quoted context omitted.
If options are "underwater" at the time of acquisition, it can be part of the deal that acquiring company does not need to honor those, and they are basically deleted. That happened to me, when options at a public company were acquired by another public company. All the vested but underwater options were simply deleted. When share price rose at the acquiring company my options would have been worth $600,000+. Oh well…
How can the deletion be legal? Isn't the purchasing company required to honor all debts of the purchasee?
debt != equity. see also bankruptcy discharge.