How I sold my stock options
segah.me
How I sold my stock options
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Re: How I sold my stock options
#2don't many option plans say that shares are non transferable until a liquidity event unless company decides they should be transferable (ala what uber did recently).
Re: How I sold my stock options
#3don't many option plans say that shares are non transferable until a liquidity event unless company decides they should be transferable (ala what uber did recently).
Yes. This is SOP for law firms authoring stock option agreements after Facebook IPO'd.
OP is extraordinarily lucky that his company allowed a stock transfer, with extraordinary being too weak of a word to describe his circumstance.
Re: How I sold my stock options
#4don't many option plans say that shares are non transferable until a liquidity event unless company decides they should be transferable (ala what uber did recently).
This was my first reaction. I don’t see why a company would allow this, it could easily put them in a tight spot if they were trying to raise capital at the same time.
Re: How I sold my stock options
#5Maybe I missed it but there doesn't seem to be much info on the selling price. Did it sell on the valuation implied by the last funding round or was it lower to "solve the risk problem for the investors?".
Re: How I sold my stock options
#6don't many option plans say that shares are non transferable until a liquidity event unless company decides they should be transferable (ala what uber did recently).
Yes. This is SOP for law firms authoring stock option agreements after Facebook IPO'd. OP is extraordinarily lucky that his company allowed a stock transfer, with extraordinary being too weak of a word to describe his circumstance.
It is possible to use a specialized finance vehicle in order to create a synthetic liquidity event for non-transferable exercised options; it is, in effect, a non-recourse promissory note.
Re: How I sold my stock options
#7Earlier quoted context omitted.
Yes. This is SOP for law firms authoring stock option agreements after Facebook IPO'd. OP is extraordinarily lucky that his company allowed a stock transfer, with extraordinary being too weak of a word to describe his circumstance.
It is possible to use a specialized finance vehicle in order to create a synthetic liquidity event for non-transferable exercised options; it is, in effect, a non-recourse promissory note.
Yes, there are several strategies. Each of them impacts significant discount on sale price, requirements to make a sale, or significant risk to option holder.
Kind of like saying "anyone can buy a car without having a job or savings" — it's true, but those deals aren't comparable to those that can buy a car with cash.
Re: How I sold my stock options
#8Earlier quoted context omitted.
Yes. This is SOP for law firms authoring stock option agreements after Facebook IPO'd. OP is extraordinarily lucky that his company allowed a stock transfer, with extraordinary being too weak of a word to describe his circumstance.
It is possible to use a specialized finance vehicle in order to create a synthetic liquidity event for non-transferable exercised options; it is, in effect, a non-recourse promissory note.
Just when I thought I was getting the hang of how equity works... I didn't understand a word of that (other than non-transferable exercised options).
Re: How I sold my stock options
#9What about those places like EquityZen, anybody done that?
Re: How I sold my stock options
#10Earlier quoted context omitted.
It is possible to use a specialized finance vehicle in order to create a synthetic liquidity event for non-transferable exercised options; it is, in effect, a non-recourse promissory note.
Yes, there are several strategies. Each of them impacts significant discount on sale price, requirements to make a sale, or significant risk to option holder. Kind of like saying "anyone can buy a car without having a job or savings" — it's true, but those deals aren't comparable to those that can buy a car with cash.
There are funds/financial firms that will fund your options exercise, and take nothing if your common shares go to zero (they take a cut if there is an IPO or other significant liquidity event). Its an equity-backed loan with no recourse.
Appears to be a reasonable option if you have a large amount of options and prefer the cash now vs later.
> All of these deals require approval by the company. Which means you don't get to choose the firm, you get to deal with the firm they approve of.
EDIT: These transactions require no agreement from your company in order to execute.