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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?

#121

Post by billmcneale »

Retric wrote: post #107
coffeemug wrote: post #99

Earlier quoted context omitted.

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.

No, it's not uncommon for startups to let you buy the stock before it even vests. The company will buy it back if you leave before you vest (although you usually don't even bother since they are worth pennies).

If the OP left after staying less than a year, they most likely didn't vest anything.

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

#122

Post by malbs »

jpdoctor wrote: post #104
malbs wrote: post #63

Earlier quoted context omitted.

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.)

yeah I definitely walked into it with my eyes closed. My wife was telling me it was a bad idea, and I still didn't listen, but hey, who listens to their wife right? haha

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

#123

Post by dbuxton »

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.

It's pretty obvious that this is Scoopler, no?

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

#124

Post by fourk »

billmcneale wrote: post #121
Retric wrote: post #107

Earlier quoted context omitted.

'Paid for my options before leaving the company.' means #1 is irrelevant. Chances are there was some issue with preferred vs common stock.

No, it's not uncommon for startups to let you buy the stock before it even vests. The company will buy it back if you leave before you vest (although you usually don't even bother since they are worth pennies). If the OP left after staying less than a year, they most likely didn't vest anything.

For reference, I had vested the shares that I purchased.

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

#125

Post by lukejduncan »

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?

So what was the legal/technical reason?

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

#126

Post by scoot »

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.

It's only defamation if it's not true. And if it's not true, why are you posting it in the first place?

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

#127

Post by jconley »

bankim wrote: post #82
rdouble wrote: post #73

Do any startups still do reverse vesting with an 83b filing?

Do you mean do startups allow employees to forward exercise options and file for 83b? If yes, I'm interested in knowing that too.

Yup, I had one recently. The company had buyback rights at the strike price of the options that were equivalent to typical vesting terms. So, a 1 yr cliff, 4 year monthly vest. I.E. Any time in year 1 they had the right to buy them all back for exactly what I would have paid to exercise.

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

#128

Post by jpdoctor »

davidjhall wrote: post #12

How about "Company folded; options worthless and owe $4000 in taxes" This was during the last Tech Bubble.

> options worthless and owe $4000 in taxes

Presumably you mean: stock shares worthless and owe $4000 in taxes.

Without that correction, many people will wonder how you own taxes on unexercised options. (It is possible, but quite uncommon.)

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

#129

Post by jpdoctor »

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…

> but is really unethical if the founders didn't take care of existing stock holders.

Happens all the time. Usually it means that the acquiring company issued a bonus to those employees it was bringing across. If you're not one of them, have a nice day.

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

#130

Post by ynd »

davidhansen wrote: post #109
fourk wrote: post #61

Earlier quoted context omitted.

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.

He is a victim here, why blame the victim over the perpetrators? Makes little sense to me. As well as saying "evil flourishes"...
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