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Ask HN: Percent of employees that benefit financially from equity offers?

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Re: Ask HN: Percent of employees that benefit financially from equity offers?

#11

Post by thiago_fm »

iExploder wrote: post #7
ost-ing wrote: post #4

I consider virtual shares (in Germany) an unregulated scam. It’s a “nice to have” but should absolutely not be considered compensation, nor should renumeration be compromised for them. I don’t know a single person who has come out profiting. Dangling carrots.

What are virtual shares exactly? Do you mean you are promised shares before the company goes public?

He means VSOPs.

They aren't shares, but options. So if the company's valuation skyrocket you hit the jackpot, but if the company growth stales you get nothing.

Of course, RSUs are better, but VSOP has a non-zero chance of making you money, it isn't 100% though.

Re: Ask HN: Percent of employees that benefit financially from equity offers?

#13

Post by nejsjsjsbsb »

scarface_74 wrote: post #10

Only one in ten startups “succeed” and by “succeed” meaning make money for investors that get a preferential treatment on exit. I’ll take equity in a private company on top of them paying my fair market value in cash. Now RSUs in a publicly traded company is as good as cash. Even though even then you have a risk of the stock falling. While I personally would never work in BigTech (again) and prefer smaller companies…

You can sell the RSU tranche the day you get it though right? So it like cash. Unfortunately that also means for tax purposes.

Re: Ask HN: Percent of employees that benefit financially from equity offers?

#14

Post by scarface_74 »

nejsjsjsbsb wrote: post #13
scarface_74 wrote: post #10

Only one in ten startups “succeed” and by “succeed” meaning make money for investors that get a preferential treatment on exit. I’ll take equity in a private company on top of them paying my fair market value in cash. Now RSUs in a publicly traded company is as good as cash. Even though even then you have a risk of the stock falling. While I personally would never work in BigTech (again) and prefer smaller companies…

You can sell the RSU tranche the day you get it though right? So it like cash. Unfortunately that also means for tax purposes.

Yes. You get taxed when they vest. At least when I was getting them, you could make a selection to sell enough to cover taxes, sell them in all, or cover the taxes yourself.

Re: Ask HN: Percent of employees that benefit financially from equity offers?

#15

Post by softwaredoug »

I believe I read (sorry can't find the study now) that the most lucrative time to join a company is just pre-IPO. You negotiate on salary as if RSUs aren't worth anything, because you can reasonably argue its all on paper. But they will still throw RSUs at you. The downside risk is there, but the reliability of high upside is more reasonable than early startup.

I can't say this is the highest expected value, its a reasonably reliable value. It seems that if you have a sense a company has a good chance of successfully IPO'ing, you can maximize negotiation of both RSU and salary at this stage.

N=1 but this worked personally for me. I remember reading this a few years back, and negotiating strongly with an offer from Reddit when the tech market was at the bottom. And it did turn out they IPO'd. I did pretty well through that.

Re: Ask HN: Percent of employees that benefit financially from equity offers?

#16

Post by dakiol »

ost-ing wrote: post #4

I consider virtual shares (in Germany) an unregulated scam. It’s a “nice to have” but should absolutely not be considered compensation, nor should renumeration be compromised for them. I don’t know a single person who has come out profiting. Dangling carrots.

Same. Worked for years for a company that offered VSOPs. They never went public. Hopefully I negotiated a decent base salary. So, as long as they offer a decent base salary and on top of that they add vsops, I’m fine. The moment they offer your less base salary in exchange for more vsops, avoid them.

Re: Ask HN: Percent of employees that benefit financially from equity offers?

#17

Post by haakonhr »

thiago_fm wrote: post #11
iExploder wrote: post #7

Earlier quoted context omitted.

What are virtual shares exactly? Do you mean you are promised shares before the company goes public?

He means VSOPs. They aren't shares, but options. So if the company's valuation skyrocket you hit the jackpot, but if the company growth stales you get nothing. Of course, RSUs are better, but VSOP has a non-zero chance of making you money, it isn't 100% though.

It's not options either (that would be ESOPs), but actually a kind of bonus structure. If there is an exit event, as specified in the VSOP agreement, you get a bonus that should be the same as what real options would have been worth. They are taxed as normal income, but you do not have to pay tax when you receive them. In the past you would have to pay tax on real options when receiving them even though they'd most likely never pay out.
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