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I'm far more curious about what will happen when these companies start seeing significant portions of their workforce facing expiring option plans...
by zzalpha 10y ago
I'm far more curious about what will happen when these companies start seeing significant portions of their workforce facing expiring option plans...
- vinceguidry 10y agoThe market solution here seems to be the companies poaching those employees giving them, as a hiring bonus, enough cash to exercise their shares. Not sure what would make that workable, or if it's even a big enough problem to demand such a solution.
- a_small_island 10y agoIt's not just the exercise price, it's the tax bill at the end of the year...
- YuriNiyazov 10y agoIf you exercise upon getting hired, there is no tax bill, because there is no spread between FMV and your exercise price. There's only a tax bill later, upon liquidation.
- scurvy 10y agoMany (if not most) early stage companies won't allow you to do this. They claim that the "legal costs" are too high. When asked how much it is and offered to cover them, I've been met with blank stares.
- YuriNiyazov 10y agoI've been met with "but if you quit without having vested all your shares, we'll have to pay you back at FMV!" - and this was a CEO that said this. Staggering ignorance w.r.t. equity.
- Illniyar 10y agoIs that a thing? I didn't know options can expire, what kind of an expiration date do they have?
- pcl 10y agoYes; options often expire 10 years after issuance.
- mifreewil 10y agoIt's common for companies to have a 90-day window to exercise your options after leaving the company. There are some friendlier companies with longer exercise windows. See: https://github.com/holman/extended-exercise-windows https://github.com/holman/extended-exercise-windows