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This is typically where the 83b elections come in, right? Also, has anyone ever had trouble with the "speculatively execute one option buy a share to get acces
by angersock 11y ago
This is typically where the 83b elections come in, right?
Also, has anyone ever had trouble with the "speculatively execute one option buy a share to get access to the books for a sanity check" thing? That's normal practice, right?
- hesdeadjim 11y agoI would absolutely do this if I find myself in a position where I am accepting ISOs again. Not doing so left me completely out of the loop in regards to company direction, how much the owners were paying themselves in dividends, or potential buyout options.
- jdawe 11y agoIn my experience common stock (i.e. what your options buy you) has no "information rights", so the company does not have to disclose financials to you. Additionally, even if you were offered the chance to buy preferred shares (what investors buy in a Series A, B, etc.), which ordinarily do carry information rights, there is usually a provision that prevents stockholders with paltry participation in those rounds (e.g. buying a single share) from enjoying information rights. It's an extremely risky situation to be an employee stockholder. You are at the mercy of the founders, board, and investors. Usually founders also hold common stock, so that is somewhat reassuring, since they're in the same boat as employees from that perspective. However--and not saying this happens often--there is nothing preventing founders from being given the option, say in an acquisition or financing round, to cash out while employees are stuck without liquidity.