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Poll: How much did you earn from your stock options during exit?

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Re: Poll: How much did you earn from your stock options during exit?

#101

Post by rjurney »

fourk wrote: post #51

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?

Talent acquisitions only pay for the TALENT being acquired. You were not acquired, so you got nothing. There is no reason to be upset here. The founders did not do you wrong. They aren't as rich as you think, just flashy.

Re: Poll: How much did you earn from your stock options during exit?

#102

Post by Timothee »

fourk wrote: post #51

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?

A comment below tickled my interest and I did some quick googling. From the information available on the web, it looks like your comment makes what happened look much worse than the reality.

So I just want to point out to others that this is one side of the story and it lacks a lot of details to draw any conclusion and ask for the names of the "guilty".

edit: since I'm getting some downvotes, let me expand a bit: it looks like said-company wasn't going anywhere, that fourk didn't work there for very long, that the founders ended up being hired by Google, and it's not clear that the company itself was really bought. So, and again I don't have the whole story either, it's not as clear-cut as "execs and investors made millions and completely screwed a key employee out of his due".

Re: Poll: How much did you earn from your stock options during exit?

#103

Post by rjurney »

maxklein wrote: post #24

You'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.

By those standards, you'd have to be even dumber to be a founder: bad hours, lots of risk, bad pay and lots of stress.

Most good founders were employees at hot startups, where they learned what to do and joined 'networks of success.'

Re: Poll: How much did you earn from your stock options during exit?

#104

Post by jpdoctor »

malbs wrote: post #63
absconditus wrote: post #26

I believe that the exact amount was $112 (net). Unbeknownst to most, our executives screwed everyone over and issued preferred stock to a major investment bank. I, and many others, had thousands of options, but the share price for common shares was too low for most grants to be worth anything. The executives all received bonuses for the sale from the investment bank.

I had a similar experience, a VC bought "preferred stock" (I can't remember the exact jargon), when the company was sold, the payout went entirely to the VC, and no standard stock holders received anything.

> (I can't remember the exact jargon)

And this is how most people are screwed. Most folks receive options and never even see the financing docs or stock plan, so they don't have a shred of knowledge about the capital structure.

(Not picking on you, except by way of example. Your situation is all-too-common.)

Re: Poll: How much did you earn from your stock options during exit?

#105

Post by corin_ »

lanstein wrote: post #91
corin_ wrote: post #20

Earlier quoted context omitted.

I think the 61K - $150K option covers that pretty well.

That wasn't there before, I'm almost positive.

Actually there must have been, as new poll options go to the bottom and there's no way to re-order them, so it wasn't added afterwards.

Apologies for the slightly snarky comment, thought you were for some reason complaining that your option was wider than you would have wanted it to be - not that I can think of any reason why anyone would whine about that.

Re: Poll: How much did you earn from your stock options during exit?

#106

Post by jpdoctor »

bankim wrote: post #70
spinlock wrote: post #62

Earlier quoted context omitted.

Wait. Why would you do this? Can't you hold your options as, well, options until you want to exercise and sell them? I don't get why you would convert options to stock unless you wanted to sell them right away. I'm sure I'm missing something. Thanks.

When one exercises options that starts holding period for capital gains...

During TechBubbleV1, many people got completely burned by AMT after exercise.

Several were bankrupted because the stock deflated. Oh, and IRS bills are not dischargable in bankruptcy, so those poor bastards had their pay attached.

Re: Poll: How much did you earn from your stock options during exit?

#107

Post by Retric »

coffeemug wrote: post #99
fourk wrote: post #51

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?

There are a number of reasons this could have happened: 1. You left before any of your stock vested. Assuming a standard four year vesting schedule and a one year cliff, this makes complete sense. (Although you are saying that you paid for your options, so this likely isn't the case here). 2. The company got shut down, its assets liquidated, and the founders and a select group of employees went to work for Google. Th…

'Paid for my options before leaving the company.' means #1 is irrelevant.

Chances are there was some issue with preferred vs common stock.

Re: Poll: How much did you earn from your stock options during exit?

#108

Post by Timothee »

asr wrote: post #100
tlianza wrote: post #79

Earlier quoted context omitted.

In this scenario it's equivalent to all of the founders quitting, shutting the company down, and going to work for Google, right? Ie. Google didn't buy / shouldn't own any of the company's assets?

I might agree with you, but we'd need more information to really know for sure. A minute of Googling turns up TechCrunch speculating YC and other investors got paid back in this deal, in which case I'd say this is pretty sleazy.

Why would it be sleazy? What if the investors got their money back and nothing more? Even if they got more based on preference, I don't see the problem.

That TechCrunch article doesn't really present the event as a great exit, but more that the founders were hired to move on from a startup that wasn't really going anywhere. (the post specifically says that Google didn't technically acquire the company)

Re: Poll: How much did you earn from your stock options during exit?

#109

Post by davidhansen »

fourk wrote: post #61
cloudhead wrote: post #56

Earlier quoted context omitted.

Maybe you should let us know what the startup was, as well as the people behind it, so we can avoid working with them.

I'd prefer to be the better person here rather than defame them publicly. If anyone would like more information or to discuss this privately, however, my email is in my profile.

I'd prefer to be the better person here rather than defame them publicly

Idly allowing bad and potentially evil behavior to go unrecognized and unchallenged is by no means being a good person. Not to Godwin the thread, but your attitude is why evil flourishes, and on much grander scales than stock allocation.

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