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Ask HN: Former employees' RSUs at risk after startup's IPO
71–80 of 172 posts
Re: Ask HN: Former employees' RSUs at risk after startup's IPO
#72I am fairly confident that you have strong legal protections against forfeiture of your RSUs under these circumstances, especially if you worked in California. Unless there is an explicit clause in your employment contract where you agree to this (fairly unusual) tax prepayment scheme, your RSUs are earned income.
IANAL, but I have been around the startup scene long enough to immediately spot the red flags here. It seems like there is an explicit strategy at play here to discourage former employees from exercising RSUs, and you will likely find a strong legal argument against these terms (i.e. prepayment and forfeiture) unless you explicitly agreed to them. To echo what will probably be stated at least a hundred times on this thread - talk to an attorney.
Re: Ask HN: Former employees' RSUs at risk after startup's IPO
#73Can someone just name the company, cause there is enfough information here that it’s not hard to figure out.
185 days before 3/15/2025 is 9/11/2024. There were these IPOs around that time (all Nasdaq) [1]:
- 9/10: TDTH
- 9/10: XCH
- 9/12: GLXG
- 9/12: FVN
Re: Ask HN: Former employees' RSUs at risk after startup's IPO
#74I read down pretty far and did not see this basic advice: you need a lawyer. Hire a very good one: they are cheaper than poor lawyers by an order of magnitude.
That lawyer will review your agreements, the state laws and the communications with the company and tell you where you’re at. You could all go in together for the lawyer btw if you have the same contract.
I bet that lawyer will tell you (if this is in California) that you just need to send a letter saying “cool guys, send the shares, I’ll worry about the taxes. I don’t consent to forfeiture.” But, crucially, I am not a lawyer and I haven’t read your agreements.
anyway I would not stress over this, but I would act quickly, don’t sign anything, don’t communicate with the company unt you’ve talked to the lawyer, and know that worst case you will be able to find a loan to bridge this. It may actually be a good candidate for a venture debt firm, but either way the lawyer you hire will probably have some leads.
Congrats on the IPO!
Re: Ask HN: Former employees' RSUs at risk after startup's IPO
#75Can someone just name the company, cause there is enfough information here that it’s not hard to figure out.
185 days before 3/15/2025 is 9/11/2024. There were these IPOs around that time (all Nasdaq) [1]: - 9/10: TDTH - 9/10: XCH - 9/12: GLXG - 9/12: FVN [1]: https://stockanalysis.com/ipos/2024/
Unless details were intentionally changed that narrows it down to two companies that are not US based, despite being traded on Nasdaq. The other two are a ETF and SPAC
Worth noting, because many people seem to assume these folks are based in SV
Re: Ask HN: Former employees' RSUs at risk after startup's IPO
#76I read down pretty far and did not see this basic advice: you need a lawyer. Hire a very good one: they are cheaper than poor lawyers by an order of magnitude. That lawyer will review your agreements, the state laws and the communications with the company and tell you where you’re at. You could all go in together for the lawyer btw if you have the same contract. I bet that lawyer will tell you (if this is in Californ…
Thank you! We are definitely contacting lawyers.
Re: Ask HN: Former employees' RSUs at risk after startup's IPO
#77Can someone just name the company, cause there is enfough information here that it’s not hard to figure out.
Why? It seems like it would be a derail and it is not hard to look up the two companies that had an IPO on October 25th 2024.
Re: Ask HN: Former employees' RSUs at risk after startup's IPO
#78Are 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…
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Re: Ask HN: Former employees' RSUs at risk after startup's IPO
#79A 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…
The best case is to not pay the taxes upfront. Say the company wants me to pay 50% tax in cash and then give me 100% of my vested RSU; I want 50% of my vested RSU without needing to pay taxes.
Yes, we are contacting lawyers.
Thanks for your attention!
Re: Ask HN: Former employees' RSUs at risk after startup's IPO
#80I am fairly confident that you have strong legal protections against forfeiture of your RSUs under these circumstances, especially if you worked in California. Unless there is an explicit clause in your employment contract where you agree to this (fairly unusual) tax prepayment scheme, your RSUs are earned income. IANAL, but I have been around the startup scene long enough to immediately spot the red flags here. It s…
Thank you!