Our Stock Option pledge
blog.clearbit.com
Our Stock Option pledge
1–10 of 36 posts
Re: Our Stock Option pledge
#2I'm glad more companies are removing the stock option golden handcuffs. Pinterest made a similar move last year: https://medium.com/@michaeldeangelo/unlocking-the-golden-han...
Re: Our Stock Option pledge
#3As someone who recently got stuck in poor option execution situation, this is great. It is certainly better for companies to compete with each other on transparency and honesty - rather than foosball and free meals.
A big problem is all the inertia in the marketplace where Option Pools, and policies of many companies are already established and written into investment rounds, legal paperwork and usually needs a board decision that may not be in their own interests.
It would be awesome if Glassdoor has some sort of info about this(Option Exercise Policy: XXXX) per company.
Re: Our Stock Option pledge
#4As someone who recently got stuck in poor option execution situation, this is great. It is certainly better for companies to compete with each other on transparency and honesty - rather than foosball and free meals. A big problem is all the inertia in the marketplace where Option Pools, and policies of many companies are already established and written into investment rounds, legal paperwork and usually needs a board…
Yes it would be great to get more public exposure about stock option policies and encourage the status quo to change.
@holman has started a GitHub project listing companies with favorable exercise windows. https://github.com/holman/extended-exercise-windows
Re: Our Stock Option pledge
#5I appreciate the thinking here and message but am concerned about this line "This will cost a few hundred dollars at most".
Clearbit has raised a $2M seed round from top-tier investors implying a post-money valuation likely over $6M. A conservative FMV of the common shares would suggest a $1.2M valuation. To exercise a 0.5% of total equity grant would cost $6,000. Something doesn't add up here.
If I am correct, will Clearbit help its employees exercise their options?
See: https://www.fenwick.com/publications/pages/playing-with-fire...
Re: Our Stock Option pledge
#6I came across a very good article on HN about funding. It gives you a complete explanation to know what happen to your stocks through each series. The charts and the dynamic ones at the end are making it even better:
Re: Our Stock Option pledge
#7I appreciate the thinking here and message but am concerned about this line "This will cost a few hundred dollars at most". Clearbit has raised a $2M seed round from top-tier investors implying a post-money valuation likely over $6M. A conservative FMV of the common shares would suggest a $1.2M valuation. To exercise a 0.5% of total equity grant would cost $6,000. Something doesn't add up here. If I am correct, will…
I believe it depends on how they raised the seed round. If it's $2M in debt (with a $6M cap), then technically the value of the company has not been determined yet -- and won't be until there is a proper priced round. This affords them some flexibility... but they still need to determine the Fair Market Value of the options.
Re: Our Stock Option pledge
#8I appreciate the thinking here and message but am concerned about this line "This will cost a few hundred dollars at most". Clearbit has raised a $2M seed round from top-tier investors implying a post-money valuation likely over $6M. A conservative FMV of the common shares would suggest a $1.2M valuation. To exercise a 0.5% of total equity grant would cost $6,000. Something doesn't add up here. If I am correct, will…
Yes, and the tax on that is a fraction of that... which is a small cost compared with cost of recruiting. remember the cash from excising the options goes back to the company so it's not really a cost (you just have to pay tax)
Re: Our Stock Option pledge
#9I appreciate the thinking here and message but am concerned about this line "This will cost a few hundred dollars at most". Clearbit has raised a $2M seed round from top-tier investors implying a post-money valuation likely over $6M. A conservative FMV of the common shares would suggest a $1.2M valuation. To exercise a 0.5% of total equity grant would cost $6,000. Something doesn't add up here. If I am correct, will…
Yes, and the tax on that is a fraction of that... which is a small cost compared with cost of recruiting. remember the cash from excising the options goes back to the company so it's not really a cost (you just have to pay tax)
Does one end up paying double taxes in such a case? Because you're "getting" the money to buy the stock and then immediately buying the shares--is that first step technically income?
Re: Our Stock Option pledge
#10This is a great trend that I'm seeing a lot of YC companies do. Early Exercise + 83b is an absolute must for all seed stage companies.
I really like the notion of helping employees exercise their options too with cash compensation and it's something we're looking into too at Pachyderm as we just started hiring.
What's the legal structure of that cash repayment? Is it a bonus or can the company just pay the exercise price themselves and that's that?