31–40 of 342 posts
Most engineers I know with stock options and a discounted salary would have been much better with a higher annual salary and no stock options at all.
Sam is dead-on that the current situation isn't fair and often offers employees little to no information about how the options work.
The 90 days to exercise thing is a real bummer -- for lots of reasons. As Sam says, not every employee is in a position to relinquish that kind of money for the options and taxes. I would say that if you are looking to go someplace else, depending on the size of the company and the situation, it's not out-of-line to try to value the options you won't get to exercise (or even the exercise price) into your new salary. Most companies aren't going to be willing to give you what you need to vest-out upfront, but it is a good way to negotiate either a one-time bonus or higher salary.
The best solution I have heard is from Adam D’Angelo at Quora. The idea is to grant options that are exercisable for 10 years from the grant date, which should cover nearly all cases That is an awesome idea, and really classy on Adam's part.
From a company's point of view, wouldn't that really suck, having all of these outstanding shares in limbo? I'd imagine at least part of the 90-day thing is just so that the company knows the status of those shares. For an employee, the company is holding those out as a carrot for you: someday those shares might pay off, if you work hard. For a former employee, he/she gets 90 days to decide whether to pony up the cas…
Don't agree: the company already got the benefit.
If anyone here has any ideas of how else we can be more friendly to employees with regard to equity I'm all ears.
The problem with the 10%/20%/30%/40% thing is that if the company shoots way up in value, an employee could theoretically be fired after two years and not capture much of the value they helped to create. It also doesn't necessarily need to be malicious [1], sometimes companies change and a person's skills aren't as valuable anymore. If I were a prospective employee I would never take a deal like this, because it is r…
I've been thinking of putting together something simple to analyze employee option paperwork and add some plain English annotations to help employees understand exactly what they're signing. Based on my experience, there's something like 5 or so templates that cover 90% of the startups in the valley, so shouldn't be too hard. Is there any interest in something like this?
When you are not yet cash flow positive as a startup you can give 'bonuses' in options rather than in cash.
I don't know if we could figure out a portion that employees could contribute to additional investment rounds if they wanted to take some money off the table.
Earlier quoted context omitted.
do you (or anyone else) know what happens if you do an 83b election then leave the company before 4 years? Also, this doesn't really help post A, particularly if you're getting pretty senior and have a bunch of experience. At my last place, I would have had a $50k bill to do an 83b. I could write that check but goddamn is that a lot of cash to part with. edit: thank you @rosser
Ask to forward exercise when joining. From what I understand, there isn't a negative impact on the employer, you are just being granted RSU's that they have an option to buy back for $0 before your cliff, and then convert to ISO's at your cliff. You can file that 83b election immediately, which will substantially drop your tax burden.
It's a massive lift for our team (based on tax savings) when an eventual liquidity event occurs, with no downside for the company other than additional paperwork and some legal costs.
I'll be forwarding this to our lawyer when we implement the legal paperwork on our stock option plan. We already do 1) and 4) as much as we can. If anyone here has any ideas of how else we can be more friendly to employees with regard to equity I'm all ears.