61–70 of 162 posts
Here's the short version. Sell. Sell it all. As soon as you are legally allowed to, sell. Sell all of it. Taxes and maxes blah blah blah just sell it, take the cash, and be thankful.
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You can ask feel free to ask for a pony in a salary negotiation, and in general I bow to no one in advising "ask for more", but that specific ask has the dual unhappy properties of being very awkward for founders to grant and yet not very useful to you the prospective employee. (Even an idealized employee who'd be capable of understanding what it meant.) "What was your most recent valuation?", "What is the size of my…
Cap table isn't the same thing as salary. It's the (future, in case of options) ownership of the company. Cap table transparency would go a long way in making VC-istan honest because the equities in salary tend to be small while those in equity are massive. If engineers in a typical VC-istan startup found out that the non-tech VPs and "product people" working 10-to-4 were making $140k while they make $110k, nothing w…
If you don't want to work at a company where a pencil-pushing meeting-dwelling financier is going to earn an outsized reward compared to your efforts as a software developer, don't work for VC-funded startups. On the other hand, VC-funded startups tend to work on fun speculative problems, because they're powered by other people's money.
What a "non-tech VP" makes has nothing to do with an engineer's outcome. Obsessing about what other people in the company make is unhealthy.
Quick question: Why should a company give share options to employees, and not plain old shares? Is this just because it's better tax-wise for the company?
If they gave you shares you'd have to pay income taxes on those shares for something that may never make you any money. Most people wouldn't choose to do that.
View it like the company giving you a cash bonus - not many people would turn down the bonus, even if it meant there would be tax due on it.
If you think the shares have future value, then paying the tax on their current price would seem a good deal. If you don't think the shares are value, then share options would be even worse.
Admittedly you've still got to pay the tax up-front...
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Without some notion of how much your equity grant represents of the company (by current dilution), the actual number of options you get cannot be sensibly valued. The total number of shares at a company is totally arbitrary . Seriously, when you register one, the state just asks you to pick a number . If a company won't tell you enough to calculate the percentage, that's like you asking "What's your offer for salary?…
I agree, makes negotiation much harder. "We're giving you 25000 options"... but if I have no idea how much its potentially worth, I dont know what I'm saying OK to. This is often the case though, I'm quite sure.
You probably shouldn't, as they are distinct terms. A futures contract obliges you to make the transaction on the specified transaction date, whereas an option gives you the option to do so.
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We should start a thread about how ignorant you were before this awesome guide. I'm sure we can talk about all sorts of stupid things people believe while managing to learn nothing beyond the scope of the very basic article.
Apparently I've triggered some deep seated angst... Let me try to clarify what I meant, and maybe you'll feel better? This post didn't present any new 'facts' for me. I was already aware of all the details he explained (and most, but not all, of the implications of those details). My point was simply that by framing shares as currency presented them in a way that I had never considered before, and that comparison cau…
I thought that shares as currency was an interesting analogy to draw too. Although I guess when you get down to it, anything that's reasonably fungible can be considered currency if you feel like it.
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We should start a thread about how ignorant you were before this awesome guide. I'm sure we can talk about all sorts of stupid things people believe while managing to learn nothing beyond the scope of the very basic article.
Apparently I've triggered some deep seated angst... Let me try to clarify what I meant, and maybe you'll feel better? This post didn't present any new 'facts' for me. I was already aware of all the details he explained (and most, but not all, of the implications of those details). My point was simply that by framing shares as currency presented them in a way that I had never considered before, and that comparison cau…
Wait, maybe if there was a higher context to share our approval of the article without distracting away from its content? Like some kind of high-level rating system that was enforced through a framework of some sort and presented as a low-friction indicator of the quality of the article? We could even improve it by presenting the highest quality articles above the fold.
Of course then content that appealed to the lowest common denominator would become the most approved, and people could congregate around shared understanding and beliefs, further cementing those ideas as the "right ideas".
Only if there were some social rules that would prevent this "circle jerking" behavior that causes forums to devolve into roaming bands of up-vote brigades. We could start by not "circle jerking" about the quality of the article, we could probably go a long way toward reducing congratulatory posts that celebrate elementary-level understanding of economic systems, and in turn, encourage feel good comments that are up-voted because people agree with them instead of them actually contributing anything.
Similarly, how liquid are markets like Second Market in terms of liquidating option value at a startup that's raised multiple rounds of funding but has yet to exit or IPO? Are there angels (or networks of angels) that buy small amounts of pre-exit equity?
What is the exact mechanism for "golden handcuffs"? Can the company prevent a vested option holder from exercising and then selling the shares to a secondary market investor immediately (offering them to the company for first refusal, obviously)? In that case, can't I just line up a secondary market investor, borrow the cash to exercise, sell, repay the loan and thus get out of the handcuffs?
It should be noted that Alex MacCaw and friends are offering a way out of this dilemma for 25-30% of the upside by supplying the cash required to exercise so that the employee can leave. This advertising is probably the whole reason Alex wrote the article.