Earlier quoted context omitted.
Hahaha definitely a red-flag if you ever work for a place that plays the LLC game. Wish my younger self knew that
Out of curiosity, did anything particularly bad happen due to working for a place playing this game? Asking for a friend..
To comfort me, the CEO told me that they would go ahead and vest my 4% shares immediately for the new entity. The checks were still cashing and I didn't think much of it at the time. The company started making decent money about 1M annual revenue, but when profit sharing season came, I was not given anything but a 2k bonus. Then one day when nobody was in the office, I happened to see some documents on a desk that dissolved the company I supposedly owned 4% of and described a 3 tier ownership scheme (dreamt up by a creative lawyer on retainer)
There are many people that will prey on young talent, get them to build their startup infrastructure by promising them 250k+ salaries plus profit sharing. After you build the thing and server your use, be warry of the people suddenly wanting to "help" or "co-administer" the system. It's code for they are trying to learn how to run things without you because you are too expensive now that the system is online. Additionally, in more conventional contracts vesting options can cost you a lot financially if you don't calculate the taxes right.
In the end the CEO and VP got sued by both their former employer and the state of california. The CEO's wife then divorced him and took half of his money after he lost nearly 500k. Karma was a little mean in my opinion on that one haha