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

news.ycombinator.com

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

#141

Post by moocow01 »

drx wrote: post #54
moocow01 wrote: post #43

Earlier quoted context omitted.

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.

Agreed - if someone enjoys their startup life, more power to them in that there is nothing that pays better than enjoying your situation. For someone who is looking at it as a financial play but sitting in a startup that is grinding them down to nothing, they are most likely making an extremely bad investment.

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

#142

Post by achompas »

nekitamo wrote: post #89
achompas wrote: post #27

Earlier quoted context omitted.

Max, are you trolling here? This kinda smells like trolling, because I don't think you'd be the type to generalize across all startups like this.

Not trolling at all. Some of us have the opinion that you have to be a fool to work at a startup.

I don't get this sentiment--it completely ignores the differences between mature and fledgling startups.

It's clearly not all unicorns and cupcakes, but there's a difference between "work for us at 2/3rds market plus 1%" and "we're VC-backed, work for us at market and get health plus other nice perks." Startups are not uniform.

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

#143

Post by achompas »

AznHisoka wrote: post #47
achompas wrote: post #27

Earlier quoted context omitted.

Max, are you trolling here? This kinda smells like trolling, because I don't think you'd be the type to generalize across all startups like this.

Why would he be trolling? Sounds like the general truth to me. I'd accuse him of trolling if he said the opposite

You really think this would be true across a spectrum of companies with different funding situations, different revenue streams, and different user bases?

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

#144

Post by achompas »

maxklein wrote: post #29
achompas wrote: post #27

Earlier quoted context omitted.

Max, are you trolling here? This kinda smells like trolling, because I don't think you'd be the type to generalize across all startups like this.

It's my opinion. Working at a startup, you're underpaid and overworked for very little financial benefit.

That's fine, I'm just surprised you'd make such a sweeping generalization. Not all BigCos are the same--why would all startups be the same?

I'm not a startup cheerleader -- "come change the world!" is the most overused pitch line ever -- but there are tons of examples (37signals, some YC teams, some of the larger NY startups) countering this generalization.

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

#145

Post by blacksmythe »

fourk wrote: post #112
Timothee wrote: post #102

Earlier quoted context omitted.

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…

I did not in any way expect this to be a serious windfall for me. I also didn't mean to imply that this was a windfall for investors (who were merely reimbursed), or anyone but founders (albeit a small one for them). Also, while IANAL, that paperwork implied that the company was purchased by Google (at least technically), contrary to what Techcrunch said. Part of my reasoning for not wanting to name the company and f…

  >> investors (who were merely reimbursed) ...
Unless the investors make money, no one makes money. This is almost a universal constant, even if in this case the founders somehow managed some perks (something I have never seen happen). It sounds like the perks are because they are valued as future employees, not because the business had any value.

There are plenty of cases of employees getting seriously shafted (investors made lots of money, but employees didn't). This is not one of those cases.

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

#146

Post by rjurney »

zach wrote: post #139
rjurney wrote: post #135

Earlier quoted context omitted.

Post it. I have data to the contrary.

Do you have as many data points as Trevor does, though? Just curious since this would be impressive in itself.

Didn't know that was Trevor, but I do have hard data on this. I took the time to collect it for the Atlanta security cluster.

Most Y Combinator founders are young, so sample bias is likely present. Then again, Atlanta sucks, so only old fuckers start companies. :)

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

#148

Post by eli »

manuscreationis wrote: post #44
eli wrote: post #39

Earlier quoted context omitted.

Well, how much do you think shares in a bankrupt company should be worth? If there's not enough money to go around, someone is going to get left with the short stick.

I think his point wasn't that someone getting the short stick was illegal, but rather that shares were bought from me without my direct consent.

Did your contract have drag-along rights[1]? I'm certainly no expert, but I think that's quite common. It would be very difficult to sell a company if you had to track down every single shareholder no matter how small their stake. So it's basically a majority rule.

[1] http://www.feld.com/wp/archives/2005/02/term-sheet-drag-alon...

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

#149

Post by jen_h »

pfarrell wrote: post #76
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.

I am having to get ramped up on this right now as my company is filing. I'm not 100% positive, but, I believe if you exercise and sell in a single transaction, you're going to get hit with ~40% short term capital gains tax. Holding the exercised stock for a year will reduce the tax hit at sell time to ~22% long term gains.

Yeah. The right time to exercise when a company is filing is like...a few years before, when the shares were pretty much imaginary and you weren't standing to be taxed for imaginary wealth (why I once agonized over buying 25 cent shares for 700 bucks in a company 4 years away from an IPO, I have no idea--it's either lost money or free cash. Assume it's lost money and you're either right or happily surprised a few years down the road; both aren't such bad outcomes).

You've likely heard this, but one thing you might want to look at is a hybrid transaction (I think they call this a "cashless transaction"); exercise and sell enough to cover taxes and to purchase anything you've got available to exercise (to hold for another year).

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

#150

Post by rjurney »

tlb wrote: post #117
rjurney wrote: post #103

Earlier quoted context omitted.

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.'

Less than "most" good founders were employees at hot startups. I base this on a good deal of data.

Evidence that "most" good founders were employees at hot startups, and that most important companies that generate the most wealth occur in 'networks of success':

https://s3.amazonaws.com/rjurney_public_web/images/Atlanta-S... https://s3.amazonaws.com/rjurney_public_web/images/fairchild... http://en.wikipedia.org/wiki/PayPal_Mafia#Membership

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