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Ask HN: Is it viable to enable employees to diversify their stock compensation?
Just a shower thought.
What could be the challenges to the concept of a fund where Start-up employees can pool in their stock compensation?
What I am talking about would work something like this:
Someone who "knows about evaluating startups" would create a club of say 20 Seed/Series A startups, employees of which could trade in their entire/portion of stock compensation for units of a consolidated fund to enable diversification.
I could see several pros and some cons of such an approach but then I have never been involved in a startup for significant scale and am definately not considering everything here.
What are your thoughts on this?
- minimaxir 11y agoYeah that's borderline insider trading. The legal fees needed to ensure this works correctly outweigh the benefit.
- kjksf 11y agoI assume you're talking about stock options, not actual stock. Most stock option grants don't allow any transfer of ownership without at least the approval of the company who issued stock options. So given the current rules for stock options such trading is not possible. Were the rules to change, it would still be highly problematic because you're essentially creating a stock exchange and those are highly regulated by the government (since without oversight they are great avenues for fraud).