Bolt Financial's loans come due • Hacker News Board

Re: Bolt Financial's loans come due

#201

Post by JumpCrisscross » Fri, May 27, 2022, 4:18 PM UTC

s1artibartfast wrote: post #171

throwaway92394 wrote: post #139

Earlier quoted context omitted.

I'm more familiar with traditional retail options, but I'm confused. I understand why the employees would want a loan - they need money to buy the shares required to exercise the loan - and I guess they can't do it through a normal broker? If the employees Exercise-to-sell-to-cover or Exercise-to-sell they should be fine right because they would have closed the loan? This would explain why so many took the loan but s…

Bolt isn't public so there is no sale option. You have to pay to exercise, pay taxes, and pray for a sale option some future date.

> Bolt isn't public so there is no sale option

Private shares are actively traded. Bolt chose to restrict its employees from being able to sell.

Re: Bolt Financial's loans come due

#202

Post by renewiltord » Fri, May 27, 2022, 4:47 PM UTC

lumost wrote: post #197

renewiltord wrote: post #193

Earlier quoted context omitted.

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.

But they won't vest, right? Here's what I mean:

- At year 0, you're granted 100 RSUs on a double trigger with a 1 yr cliff, monthly vest after

- At year 1, you have vested 0 but if the company went public you will immediately vest 25

- At year 4, with the company still private, you have vested 0 but if the company went public or had a liquidity event you will immediately vest 100

- At year 5, with the company still private, you are going to quit. If you vest now, you must pay tax, but no way to do that with cash unless company withholds RSU percentage

In the double trigger case, at year 5, you leave empty handed. In the single trigger, you pay tax with illiquid stock (through withhold or pay cash).

I've always only had options or stock, so do correct me if I'm wrong.

Re: Bolt Financial's loans come due

#203

Post by throwaway92394 » Fri, May 27, 2022, 8:46 PM UTC

JumpCrisscross wrote: post #201

s1artibartfast wrote: post #171

Earlier quoted context omitted.

Bolt isn't public so there is no sale option. You have to pay to exercise, pay taxes, and pray for a sale option some future date.

> Bolt isn't public so there is no sale option Private shares are actively traded. Bolt chose to restrict its employees from being able to sell.

Forgive me if this is a dumb question -

Assuming you're an employee with a relatively small number of shares (in terms of company control) - what's the point of shares if you can't sell them? Just _in case_ you can sell them later? Some type of dividend/profit sharing (which seems unlikely for a startup)?

Re: Bolt Financial's loans come due

#204

Post by s1artibartfast » Sat, May 28, 2022, 12:38 AM UTC

throwaway92394 wrote: post #203

JumpCrisscross wrote: post #201

Earlier quoted context omitted.

> Bolt isn't public so there is no sale option Private shares are actively traded. Bolt chose to restrict its employees from being able to sell.

Forgive me if this is a dumb question - Assuming you're an employee with a relatively small number of shares (in terms of company control) - what's the point of shares if you can't sell them? Just _in case_ you can sell them later? Some type of dividend/profit sharing (which seems unlikely for a startup)?

Yes, the main value is that maybe you can sell them someday.

This is why it is incredibly stupid that the IRS makes you pay taxes when you get them.