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Frankly institutional investors still have leverage over founding teams, and unless the company is a "darling" that has investors fighting for cap space, being

Frankly institutional investors still have leverage over founding teams, and unless the company is a "darling" that has investors fighting for cap space, being "nonstandard" will be a possible liability. Laughing at the question is obviously uncalled for, but there are legitimate cause for concern for adopting such policies. Currently, late stage high growth companies and YC companies are the two segments best positioned to negotiate against VCs for these terms to become "standard".

kelukelugames 11y ago
Employees should have more rights. I wish we could make this standard.
- toomuchtodo 11y ago
  YC could use their leverage to do so, if they were so inclined. The only other option is for tech employees not to take jobs at firms with less-than-ideal equity terms.
- zenlikethat 11y ago
  Employees have plenty of rights, you're talking about giving them additional privileges. No one forces people to take equity compensation instead of salary and as long as employees continue to do so the practice will continue.
  - jamra 11y ago
    I don't believe equity should be instead of salary but if you are given the option of owning what you create, you shouldn't be enslaved by it.
    - zenlikethat 11y ago
      It's horribly insensitive to even mention slavery in the same breath. There are actual slaves in the world and this is a completely different situation.
xenadu02 11y ago
At PlanGrid we (employees) pushed for a longer window. One of the founders explained that this "convert to NQO after X time" is not an IRS-tested policy as of yet. The lawyers are wary of it and the negative tax consequences will hit employees under the AMT line the hardest if the policy is wrong. That said, they are working on it and intend to implement a similar policy if possible. Reputable founders and investors don't want to force people to stay just to keep their options, nor screw people out of compensation they earned.

kelukelugames 11y ago

Employees should have more rights. I wish we could make this standard.

toomuchtodo 11y ago
YC could use their leverage to do so, if they were so inclined. The only other option is for tech employees not to take jobs at firms with less-than-ideal equity terms.
zenlikethat 11y ago
Employees have plenty of rights, you're talking about giving them additional privileges. No one forces people to take equity compensation instead of salary and as long as employees continue to do so the practice will continue.
- jamra 11y ago
  I don't believe equity should be instead of salary but if you are given the option of owning what you create, you shouldn't be enslaved by it.
  - zenlikethat 11y ago
    It's horribly insensitive to even mention slavery in the same breath. There are actual slaves in the world and this is a completely different situation.

xenadu02 11y ago

At PlanGrid we (employees) pushed for a longer window. One of the founders explained that this "convert to NQO after X time" is not an IRS-tested policy as of yet. The lawyers are wary of it and the negative tax consequences will hit employees under the AMT line the hardest if the policy is wrong. That said, they are working on it and intend to implement a similar policy if possible. Reputable founders and investors don't want to force people to stay just to keep their options, nor screw people out of compensation they earned.