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Bolt Financial's loans come due

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Re: Bolt Financial's loans come due

#191

Post by ceras »

sb8244 wrote: post #190
lumost wrote: post #173

Earlier quoted context omitted.

RSUs are only taxed when the company is liquid, not when they are vested (which is one and the same post IPO). So the tax free options are really just locking in long term cap gains. Of course the con is that it’s not actual compensation as the stroke will be equal to the present valuation.

The info I've seen for RSU indicates tax on vest, even if the stock is not liquid (private company). Is it really true that tax is only if the asset is liquid? Does the IRS make a distinction between liquid and illiquid here?

If they're issued as double-trigger RSUs then you're only taxed when they're liquid. That's because they aren't really yours till a liquidation event.

Re: Bolt Financial's loans come due

#192

Post by renewiltord »

scarface74 wrote: post #179
renewiltord wrote: post #162

Earlier quoted context omitted.

So you grant stock and that’s taxed at grant or you grant RSUs that convert at vest and are taxed at vest. But the stock is not liquid. How are you going to pay the tax. At least, with options you can just choose to sit on them. One of my friends walked away from an options grant and I exercised only when I wanted to. No tax implication till exercise. That’s a big advantage. Early exercise is a big play. You do it if…

You pay the tax by selling shares of the stock when they vest. It’s earned income like any other earned income. Some companies let you sell fractional shares to cover taxes.

Who are you selling to? It's not public. Secondary markets aren't that prevalent.

Re: Bolt Financial's loans come due

#193

Post by renewiltord »

ceras wrote: post #191
sb8244 wrote: post #190

Earlier quoted context omitted.

The info I've seen for RSU indicates tax on vest, even if the stock is not liquid (private company). Is it really true that tax is only if the asset is liquid? Does the IRS make a distinction between liquid and illiquid here?

If they're issued as double-trigger RSUs then you're only taxed when they're liquid. That's because they aren't really yours till a liquidation event.

You have to stay for the liquidation event, right? Even if you have a large amount positive there you're forced to remain at the job until the liquidity event.

Re: Bolt Financial's loans come due

#194

Post by scarface74 »

renewiltord wrote: post #192
scarface74 wrote: post #179

Earlier quoted context omitted.

You pay the tax by selling shares of the stock when they vest. It’s earned income like any other earned income. Some companies let you sell fractional shares to cover taxes.

Who are you selling to? It's not public. Secondary markets aren't that prevalent.

I was responding to the part about RSUs. In hindsight, it is clear to me that the parent wasn’t talking about public companies. Are RSUs a thing in non public companies.

Re: Bolt Financial's loans come due

#196

Post by sb8244 »

scarface74 wrote: post #194
renewiltord wrote: post #192

Earlier quoted context omitted.

Who are you selling to? It's not public. Secondary markets aren't that prevalent.

I was responding to the part about RSUs. In hindsight, it is clear to me that the parent wasn’t talking about public companies. Are RSUs a thing in non public companies.

I have seen RSU granted at non public companies. But I think it was a one time thing when I saw it, after a private equity event occurred.

Re: Bolt Financial's loans come due

#197

Post by lumost »

renewiltord wrote: post #193
ceras wrote: post #191

Earlier quoted context omitted.

If they're issued as double-trigger RSUs then you're only taxed when they're liquid. That's because they aren't really yours till a liquidation event.

You have to stay for the liquidation event, right? Even if you have a large amount positive there you're forced to remain at the job until the liquidity event.

No, once the RSUs vest, they are yours at liquidation.

Re: Bolt Financial's loans come due

#198

Post by lumost »

scarface74 wrote: post #194
renewiltord wrote: post #192

Earlier quoted context omitted.

Who are you selling to? It's not public. Secondary markets aren't that prevalent.

I was responding to the part about RSUs. In hindsight, it is clear to me that the parent wasn’t talking about public companies. Are RSUs a thing in non public companies.

RSUs are pretty common in successful private companies. Particularly once it’s possible to put a dollar value on the equity.

Re: Bolt Financial's loans come due

#199

Post by mbesto »

scarface74 wrote: post #189
mbesto wrote: post #187

Earlier quoted context omitted.

> And this “I’ll get rich!” statistical improbability is why thousand of employees are willing to work for less than their market value in exchange for Monopoly money. And this is precisely my point. If less IC's believed this, it would put market pressure on startups to give them more options and better outcomes (including taxes).

The only “better option” I would accept is more cash - not Monopoly money.

Totally, but startups (literally?) do not have that option.

Re: Bolt Financial's loans come due

#200

Post by JumpCrisscross »

fnordpiglet wrote: post #170
JumpCrisscross wrote: post #113

Earlier quoted context omitted.

> it’s not a publicly traded security FYI, this is irrelevant with respect to the SEC's jurisdiction [1]. [1] https://www.sec.gov/oiea/investor-alerts-bulletins/ib_privat...

Your link outlined that unregistered securities don’t have oversight by the SEC and outlined how you better be careful what you’re getting into. It didn’t outline how the SEC regulates them beyond limits on what you can do with them without registering them. They wouldn’t be generally involved in non public shares agreements.

> unregistered securities don’t have oversight by the SEC

The SEC created a safe harbor for registration. The Securities Act of 1933 regulates all securities [1]. This is why private companies issuing shares have to hire securities lawyers.

[1] https://en.m.wikipedia.org/wiki/Securities_Act_of_1933

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