When a Unicorn Startup Stumbles, Its Employees Get Hurt • Hacker News Board

Re: When a Unicorn Startup Stumbles, Its Employees Get Hurt

#271

Post by rmk » Sat, Dec 26, 2015, 6:02 AM UTC

harryh wrote: post #254

serge2k wrote: post #251

Earlier quoted context omitted.

Who's talking about getting rich? If investors are breaking even then employees deserve to at least not be losing out thanks to taxes. Preferably they should get enough return to roughly make up for any salary loss they took in exchange for equity. If the VCs start raking in cash then employees should too. The story here is execs made money (6 million for the CEO), VCs roughly broke even, employees got screwed over.…

Employees only lost money due to taxes because they tried to manipulate their tax rates. There's really on the employees, not anyone else. I agree with you about the CEO.

"Manipulate their tax rates" --- how very callous! VCs pay very little taxes on their take (carried interest), CEO walks away with 6+ million, and employees who have spent a big chunk of their most valuable resource --- their time --- try to set their long term capital gains clock ticking, taking on a huge tax risk in the process. Calling that tax manipulation is just outrageous.

Re: When a Unicorn Startup Stumbles, Its Employees Get Hurt

#272

Post by brianmcconnell » Sun, Dec 27, 2015, 12:40 AM UTC

Good/Visto alum here. I am just thankful that some omniscient hedge fund people offered to buy my shares at a little over a buck a share five years ago (hoping to cash in on their forthcoming IPO no doubt). This company was not a unicorn. It was a tapeworm! Not at all surprised at the outcome, except that it wasn't an outright courthouse auction of office supplies.

Re: When a Unicorn Startup Stumbles, Its Employees Get Hurt

#273

Post by sjg007 » Mon, Dec 28, 2015, 5:02 PM UTC

ChuckMcM wrote: post #253

sjg007 wrote: post #225

Earlier quoted context omitted.

Question: If you are a share holder (e.g. you've converted say 1 option to stock. Do you not get access to the outside appraisals?

Not generally. There are two things at work here, one is the 409a valuation which is somewhat formulaic and then there is the valuation of preferred shares which have different rights than common stock. Typically you have to own a preferred share to get rights to information about outside appraisals.

Can a common shareholder or anyone get a description of the preferred share holder rights? Is it in the articles of incorporation?

Re: When a Unicorn Startup Stumbles, Its Employees Get Hurt

#274

Post by ScottGillis » Tue, Dec 29, 2015, 3:05 PM UTC

sarciszewski wrote: post #21

ScottGillis wrote: post #18

Earlier quoted context omitted.

It's all about risk. Unfortunately, this risk did not pay off.

If you want risk, be an entrepreneur. If you want security, be an employee for a big company. And I suppose I should add, "If you want to get screwed over, be an employee at a unicorn startup," based on this new information.

Considering I work for the biggest hospital chain in the world, I just had to seek new employment because they closed our 'division' down without notice. Security is an illusion, or temporary at best.

Risk is real. And it resides in all places of employment. You have to hedge your bets.