I've made money on my ISOs at every startup I was an early employee of. The secondary markets are fairly liquid if you know how to navigate them. None of the companies were in the Bay Area either.
Startup Stock Options – Why a Good Deal Has Gone Bad
281–290 of 391 posts
Re: Startup Stock Options – Why a Good Deal Has Gone Bad
#282Earlier quoted context omitted.
If you think of the Valley (or wherever you are) as a lottery then your chances of winning are about the same as those of a lottery. If you think of yourself as your personal VC then your odds approach those of a VC which while not great and moreover not diversified, they are much much better than a lottery.
How do you diversify as an employee/engineer? work for 10 startups at the same time?
Bounce around until you find somewhere that has a rocketship trajectory? If you can work at 10 startups over a 20 year career, your odds aren't terrible
Re: Startup Stock Options – Why a Good Deal Has Gone Bad
#283Check out the Employee Stock Option Fund (www.esofund.com), we help employees fund the cost of exercise and any taxes. Our funding is on a non-recourse basis so we can help alleviate any risk (especially given the long time to exit that is mentioned here).
Re: Startup Stock Options – Why a Good Deal Has Gone Bad
#284Earlier quoted context omitted.
I am curious how reasonable people with many options of where to work turn a blind eye to what their companies do. You are correct that no company is perfect, but some are less perfect than others. It seems many people like just shrug their shoulders and move on pursing the fun projects they are well-paid to work on. Such is the human condition.
>I am curious how reasonable people with many options of where to work turn a blind eye to what their companies do. In my case a lot of it comes down to me, as an insider, knowing that you're wrong. "Monetizing people" is sort of meaningless. That's an objection to capitalism, if anything, not Google. Google no more monetizes people than a bank, or a rideshare company or even a university. Short of maybe fundamental…
Well we are way OT so I will let you have the last word. Thanks for sharing your thoughts.
Re: Startup Stock Options – Why a Good Deal Has Gone Bad
#285Earlier quoted context omitted.
If early liquidity wasn't an option for founders, this massive pre-ipo/private-ipo market wouldn't exist. Without early liquidity, a pre-ipo zuck/kalanick/etc. would be a paper billionaire with $0 in the bank and >$1bn "invested" in a risky tech startup. That's not financially or mentally sound, even by their risk lovin standards. If investors demanded every penny go towards growing the business, those CEOs would jus…
> Employee options holders can't just decide to take a company public, so their interests can stay misaligned. Not for long, though. The standard HN advice of "value options at $0" came about from a generation of employees conned by this, as you call it, misalignment. Also, when you trap employees into heavy golden handcuffs, abuses of power in line management thrives (as what happened at Uber).
Given tech workers complete inability to form a union or guild I wouldn't bet on it.
Re: Startup Stock Options – Why a Good Deal Has Gone Bad
#286Earlier quoted context omitted.
Article is titled "why a good deal has gone bad." My point is that winning does not make it a good deal. To expand on it further, even if you are lucky to have joined a unicorn, you still didn't get a good deal in comparison to virtually everyone else involved in the company. The founders are likely billionaires and you made off with a low 7 figure outcome while taking on only marginally less risk. That's not a good…
The rational comparison is whether you got a good deal relative to the other options open to you , not whether you got a good deal relative to the other people involved in the startup . By the time a startup has raised VC and hired employees, they've usually already passed several risky filters: they've found a market, they've built an initial proof-of-concept themselves, they've convinced investors to give them mone…
I disagree. If that's the only consideration, it creates incentive for the super rich to ensure all other options are bad; that'll ensure you pick the least bad option, the one that benefits them the most.
You have to include whether you are enabling greater income disparity, to ensure there is a disincentive for those in power to create that sort of environment for you. It is rational to consider both what benefits you, -and- what benefits society at large, and if you have sufficiently not terrible options to choose from, picking the one that does not greatly enrich another on your effort is a positive.
Re: Startup Stock Options – Why a Good Deal Has Gone Bad
#287Earlier quoted context omitted.
You're being downvoted, but I agree. I worked at a BigCorp and it was one of the worst years of my life. The work/life balance was awful, and the pay was shit compared to the hours I put in and satisfaction I got out of the job. All other experiences I've had have been much more satisfying. On top of this, people think BigCorp is a safe bet where a startup is not, but BigCorp lays people off in large swaths all the t…
Can someone tell me what letter "BigCorp" starts with? I'm scared because I'm looking at a job at a big corp., but I was under the impression that I could leave the office at 5pm.
It all depends on the team you are on. When I worked at IBM I knew lots of people who were 8 to 4. My team was pretty much 60 hour weeks minimum. Though it was because of the asshole management I had.
I once got a dressing down from my director because I took a PTO day after working 20 days straight. I am so glad I don't work there anymore.
Re: Startup Stock Options – Why a Good Deal Has Gone Bad
#288I made a bunch of money from ISOs at large, established companies. I made zero (well, negative, really) from startup stock options, even before things got really shifty in the 2000s. One startup that I left, that is now a billion dollar company, simply decided to "extinguish" the shares I bought a few years after I resigned. I was probably cheated, but it's not worth the effort to go after them and they know it. Trea…
>Treat startup options as wastepaper. You might get lucky, but it's really, really unlikely. I have a similar story. I've been a part of three startups (two exited, one still going) and the options in all were only worth an eventual capital loss. For my last company, I owned nearly a percent of shares, but they were still worth zero. The only money I got was a cash bonus and stock from the acquiring company as a rete…
You got $0 from your equity with ~1% of the company: is the reason the fact that the company turned against its employees, or more that the company exited for less than its last valuation and so there was no other way than make common shares worthless (like in the other conversation parallel to this one)?
Thanks
Re: Startup Stock Options – Why a Good Deal Has Gone Bad
#289Earlier quoted context omitted.
2+ hours per day commuting? BART from Berkeley to Powell St station is 30 minutes. You have last mile for sure, but this totally works for most SF based startup jobs. But either way... doesn't this prove my point? This does not sound like a difficult way to live, _and_ it factors in luxuries (I for one definitely do not spend $10k/year on car ownership).
> 2+ hours per day commuting? BART from Berkeley to Powell St station is 30 minutes. 1 hour on/waiting for BART + ~40 minutes walking between your house and BART + ~20 minutes walking between BART and your job gets pretty close to 2 hours. Car cost is indeed high, but if you have a kid you'll probably need one and then you have to factor in the cost of childcare... $2k/month?
Buy a Brompton folding bike - not sure if the US has the same tax advantages that the UK has.
Re: Startup Stock Options – Why a Good Deal Has Gone Bad
#290Valid reasons to work for a startup: - You are a cofounder. - You have little experience and you are using this to break into the industry, and get experience on many different technologies ("wear many hats"). - They are working on a very specific problem or using a specific technology that you strongly desire to work on and it's difficult to do it anywhere else. - You want to work a certain way (remote, on the beach…
Or if you are an older dev, picking up some more modern skills. I joined a startup for just under a year, and while I did not go in intending for it to be short-term, it ended up that way. But I modernized my skill set, got to work with more modern processes, and walked out a stronger dev than when I walked in.
Do you mind saying how old you are? One of my fears is if you're an programmer, you either need to move into management or quit being a programmer because of age bias. I prefer coding over management though.