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Stripe faces $3.5B tax bill as employees' shares expire

bloomberg.com

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Re: Stripe faces $3.5B tax bill as employees' shares expire

#371

Post by nkjnlknlk »

matthewowen wrote: post #357
marcus_holmes wrote: post #330

Earlier quoted context omitted.

> Also tbh a lot of people are just really bad at judging companies and wind up working at startups that are obviously going to fail. You really do have to make an honest assessment of if you are good at picking winners. It's luck, not good judgement. No-one knows how to accurately assess whether an early-stage startup is going to succeed or fail. If it was possible, accelerators would have better-than-background rat…

You don't need to join an early-stage startup – as a mid-to-senior engineer, even if you only join places that are series-B or later you can still get equity packages that ultimately end up netting to >1MM/year with the kind of valuation growth that the successful companies in that profile see. I think luck is a big part of it absolutely, I just don't think it's the only piece. But I also know that IME some engineers…

Can you speak as to how you would develop the skill to identify companies that end up having success but _also_ compensate their employees well? Also, if you're actually good at that skill, aren't you incentivized to just be an investor instead?

Regardless, being able to identify "company success" is something that's always been taught as luck/lottery so I'd love to improve my ability here.

Re: Stripe faces $3.5B tax bill as employees' shares expire

#372

Post by braza »

noja wrote: post #224

Who is this news for? It can't be Stripe, they already know this. It can't be investors, this information is already priced in.

For is interesting because as an employee I can see different job dynamics being played out and learn from that for the next position.

For instance: this is a big topic for folks that wants to join late stage scale-ups because since they are issuing RSUs instead options to be attractive for future employees it comes with a very risky dynamic that is the company let those RSUs expire, or worse: folks overhang in some financial obligations in some not liquid instrument.

Re: Stripe faces $3.5B tax bill as employees' shares expire

#373

Post by gitfan86 »

nkjnlknlk wrote: post #371
matthewowen wrote: post #357

Earlier quoted context omitted.

You don't need to join an early-stage startup – as a mid-to-senior engineer, even if you only join places that are series-B or later you can still get equity packages that ultimately end up netting to >1MM/year with the kind of valuation growth that the successful companies in that profile see. I think luck is a big part of it absolutely, I just don't think it's the only piece. But I also know that IME some engineers…

Can you speak as to how you would develop the skill to identify companies that end up having success but _also_ compensate their employees well? Also, if you're actually good at that skill, aren't you incentivized to just be an investor instead? Regardless, being able to identify "company success" is something that's always been taught as luck/lottery so I'd love to improve my ability here.

I'm in that situation, I've made more money on investing in technology companies than working at them. Unfortunately the skillsets are somewhat orthogonal so I was unable to get a job at Google, but was able to buy in at the IPO.

Re: Stripe faces $3.5B tax bill as employees' shares expire

#374

Post by nrmitchi »

zamnos wrote: post #152
akavi wrote: post #100

Earlier quoted context omitted.

You can get loans backed by the shares themselves. Ie, the lender gets x% of the shares, rather than being paid back a specific dollar amount at a later time.

More explicitly, if the shares go to zero, you don't owe any money

If the shares to go 0, and the loan is discharged, the discharged amount is still considered taxable income (at least if you are subject to US taxation)

Re: Stripe faces $3.5B tax bill as employees' shares expire

#375

Post by disgruntledphd2 »

ghaff wrote: post #314
brandall10 wrote: post #288

Earlier quoted context omitted.

It does seems that unicorny startups are full of ex-FAANG though.

Is that surprising? They've probably already made lots of money at a large company and want to do something they consider more exciting albeit financially risky.

Nah, it's that they feel they didn't make enough from FAANG cos they got there too late (everyone in a successful growth company feels this way) and want to try again.

Additionally, at the time they joined FAANG those companies weren't as big and they might prefer that environment (I know I do, at least).

Re: Stripe faces $3.5B tax bill as employees' shares expire

#376

Post by valzam »

KptMarchewa wrote: post #345
valzam wrote: post #74

Earlier quoted context omitted.

The gains are realised, you just aren't getting cash but company stock. The 'gain' is the difference between option strike price and market value of the shares. Since stripe is privat the market value is a bit murky but that doesn't deter the IRS. EDIT: spelling

How are they, if you're literally prevented from exchanging them to legal tender? It's like taxing lottery tickets on potential win prize.

Actually that's not a bad analogy but against your point: options are winning lottery tickets. As long as you don't exchange them for the prize (the actual stock) you are not taxed. When you do, you have to pay tax on the difference between how much the options cost and the value you get back.

Re: Stripe faces $3.5B tax bill as employees' shares expire

#377

Post by greedo »

wreath wrote: post #240
admissionsguy wrote: post #232

Earlier quoted context omitted.

But we get frEe hEaLtHcaRe! And when you factor in the municipal bus network, a $40k salary at Klarna in Stockholm is basically the same as a $350k salary at Stripe in the US. Not to mention in the USA, god knows what cookies might be put into your browser by any random cooking blog, without warning.

You dont have free healthcare. You pay for it like tech employees in the US do and you probably get worse service. At least there is a chance in the US to make generational wealth for a middle class, but no way in hell in Europe.

You should look up "Temporarily Embarrassed Millionaire."

Re: Stripe faces $3.5B tax bill as employees' shares expire

#378

Post by jjav »

matthewowen wrote: post #357
marcus_holmes wrote: post #330

Earlier quoted context omitted.

> Also tbh a lot of people are just really bad at judging companies and wind up working at startups that are obviously going to fail. You really do have to make an honest assessment of if you are good at picking winners. It's luck, not good judgement. No-one knows how to accurately assess whether an early-stage startup is going to succeed or fail. If it was possible, accelerators would have better-than-background rat…

You don't need to join an early-stage startup – as a mid-to-senior engineer, even if you only join places that are series-B or later you can still get equity packages that ultimately end up netting to >1MM/year with the kind of valuation growth that the successful companies in that profile see. I think luck is a big part of it absolutely, I just don't think it's the only piece. But I also know that IME some engineers…

> You don't need to join an early-stage startup – as a mid-to-senior engineer, even if you only join places that are series-B or later

I'd say the mid-growth time (series B and nearby but of course depends on the company) is a particularly bad time to join a startup. It is too late to get favorable stock options but too early to tell if it's going to be a home run. So for individual contributors it's pretty much all blind risk with low probability of reward.

Good times to join a startup are very early when the valuation is a couple pennies or less so you can get meaningful percentage of stock and you can early exercise all of it for little money and file 83b.

Or join late in the game startups that are big hits and clearly going to the IPO. Way less stock, but risk of failure is now small.

Re: Stripe faces $3.5B tax bill as employees' shares expire

#379

Post by fallingknife »

scarface74 wrote: post #370
fallingknife wrote: post #368

Earlier quoted context omitted.

It doesn't, but if you accepted an offer where the base salary doesn't cover your financial needs, then that's on you. And it's good to remember, that while RSUs are nice for the reasons you state, companies that give them out tend to pay a lower cash salary because of that, and if those stock prices go down, so does your TC, and it could be quite a big drop.

Well, all indications are that the BigTech companies are issuing new stock to at least keep people at their initial cash+stock compensation grant+a modicum of a raise. I’ll know myself in a couple of months. I’m in my 3rd year and my first full year of base + RSUs instead of base + 2 years prorated signing bonus + back heavy vesting schedule. (Yeah I know, how do I say where I work without saying where I work)

I passed on interviewing there b/c I hear the culture is brutal with no work life balance. Is that true in your experience?

Re: Stripe faces $3.5B tax bill as employees' shares expire

#380

Post by scarface74 »

fallingknife wrote: post #379
scarface74 wrote: post #370

Earlier quoted context omitted.

Well, all indications are that the BigTech companies are issuing new stock to at least keep people at their initial cash+stock compensation grant+a modicum of a raise. I’ll know myself in a couple of months. I’m in my 3rd year and my first full year of base + RSUs instead of base + 2 years prorated signing bonus + back heavy vesting schedule. (Yeah I know, how do I say where I work without saying where I work)

I passed on interviewing there b/c I hear the culture is brutal with no work life balance. Is that true in your experience?

I work in Professional Services as a billable consultant (cloud app dev). Most of us are much older with families and wouldn’t deal with interference with our home life. Our division is much more “enterprisey”.

Also, since our division is mostly remote (even pre-Covid) and most of us are established in our career, we have much more optionality, a larger network, and hopefully a larger nest egg.

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