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Ask HN: Former employees' RSUs at risk after startup's IPO

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Re: Ask HN: Former employees' RSUs at risk after startup's IPO

#61

Post by Mistletoe »

zeroq wrote: post #60

A side note. It was 2006 when I joined Wikia (Fandom). I was being paid $850 per month, but I also received a piece of paper promising me shares worth of $15,000. It felt like a good chunk of money. But then I asked myself few questions: (a) being an Elbonian citizen, how do I enforce this contract? (b) how much would it it cost me to enforce this contract? (c) even if I receive these shares and the company would not…

Really think you should have at least taken the paper with you. What would they be worth now?

Re: Ask HN: Former employees' RSUs at risk after startup's IPO

#62

Post by DannyBee »

A few things -

First, What's your end goal here? Is it to not forfeit the RSU's? Is it to not pay the taxes upfront? etc

You ask a lot of "is this normal questions", but it sort of doesn't matter if it's normal if you want something else.

Maybe the answers affect the chances of getting that something else, but it's really hard to give advice without knowing what you actually want to achieve.

It will quickly become a sort of academic discussion.

At the end you say you want to explore "potential solutions" - but can we start with what you want the outcome to be, actually?

Second, you say you want to "engage in a conversation with the company to explore potential solutions". Uh, okay.

Right now you have 30 days. Best case, assuming you don't have to do something before then, notification wise. Do you have meaningful legal representation?

If not, will you go that far, assuming the company offers you absolutely nothing? Or doesn't even bother to respond?

If you don't have lawyers, but are planning on going that far, you don't have a huge amount of time to get them and have them help.

Even if you aren't, you are veering quickly into territory where it sounds like you need more than just a bunch of questions answered by smart people on the internet.

You should strongly consider professional advice here, if for no other reason than the ability to have a live conversation about this.

This isn't idle internet curiosity, it sounds like it actually matters to y'all.

Re: Ask HN: Former employees' RSUs at risk after startup's IPO

#63

Post by benjaminwootton »

rootsudo wrote: post #52
danielmarkbruce wrote: post #14

Earlier quoted context omitted.

This is cynical and more frequently wrong that right. In most cases, the company is trying to avoid securities regulation screw ups, tax screw ups, other regulatory or legal screw ups. Sometimes they are overly conservative and it seems annoying, but that's what they are doing. As an example, Stripe went out of their way to get former employees paid.

100% disagree. Just because one company goes out of the way for PR good will does not many many other companies will. Many companies do not care about you once you are a departed employee. For example, see how easy it is to get your bi weekly paycheck copies. Most will not reply at all.

Many companies will throw existing employees and even founders under the bus if they think their is a few dollars to be won. To think they wouldn’t play games with ex employees is naive in the extreme.

Re: Ask HN: Former employees' RSUs at risk after startup's IPO

#64

Post by NhanH »

danielmarkbruce wrote: post #14
hansonkd wrote: post #6

> We are curious if this type of distinction between current and former employees is typical for post-IPO RSU settlements. I'm watching this thread, but just as a reminder that it benefits the company to be as vague and complicated as possible for ex-employees trying to exercise their equity rights. You and your equity are effectively dead weight to the company now and it's in their best interest to get you to forfei…

This is cynical and more frequently wrong that right. In most cases, the company is trying to avoid securities regulation screw ups, tax screw ups, other regulatory or legal screw ups. Sometimes they are overly conservative and it seems annoying, but that's what they are doing. As an example, Stripe went out of their way to get former employees paid.

This is not cynical. The situation is that a) there will be a team of very expensive lawyers and accountants working out how to best implement the plan that benefits the company (whom you can’t compete) and b) crucially, you have no control and prior on knowledge on what that plan would look like. It is not about the company trying to screw an individual over, it’s more the fact that the company will be very unconcerned if their plan is against your benefit, and you have no way to align your own benefits with the plan.

Re: Ask HN: Former employees' RSUs at risk after startup's IPO

#65

Post by orange_joe »

Mistletoe wrote: post #61
zeroq wrote: post #60

A side note. It was 2006 when I joined Wikia (Fandom). I was being paid $850 per month, but I also received a piece of paper promising me shares worth of $15,000. It felt like a good chunk of money. But then I asked myself few questions: (a) being an Elbonian citizen, how do I enforce this contract? (b) how much would it it cost me to enforce this contract? (c) even if I receive these shares and the company would not…

Really think you should have at least taken the paper with you. What would they be worth now?

He's speaking rhetorically, most of the time the company setups you up with options that expire worthless.

Re: Ask HN: Former employees' RSUs at risk after startup's IPO

#66

Post by zeroq »

Mistletoe wrote: post #61
zeroq wrote: post #60

A side note. It was 2006 when I joined Wikia (Fandom). I was being paid $850 per month, but I also received a piece of paper promising me shares worth of $15,000. It felt like a good chunk of money. But then I asked myself few questions: (a) being an Elbonian citizen, how do I enforce this contract? (b) how much would it it cost me to enforce this contract? (c) even if I receive these shares and the company would not…

Really think you should have at least taken the paper with you. What would they be worth now?

as joe said, there was a small footprint saying I have to stay X amount of time with the company to vest these shares.

Re: Ask HN: Former employees' RSUs at risk after startup's IPO

#69

Post by blindriver »

Are you in the US? Because what you're describing doesn't sound like how it would work in the US.

When the company IPOs, your vested shares would immediately vest into actual shares. At that point, you would be taxed and awarded a W-2. This is non-negotiable, and this is something that the company would be forced to handle. The idea that you have a lingering tax payment due before lockout period expires doesn't make sense to me. Your RSUs are now shares and when that conversion occurred on IPO date, you would have been taxed. You own no more tax until you sell your shares.

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