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It's not clear to my why you value stock grants so much more highly than stock options. They certainly can be in some circumstances (though in those cases they
by harryh 10y ago
It's not clear to my why you value stock grants so much more highly than stock options. They certainly can be in some circumstances (though in those cases they come with a healthy tax bill), but for early stage-ish startups there generally won't be a huge difference.
- cm3 10y agoA stake in the company means I own part of it, usually 5 or 10 percent at minimum to attract technical talent. Options or stocks are harder to quantify.
- rrdharan 10y agoI imagine you know this but the tax advantages for stock options aren't as clear cut as you make them sound. To make them more compelling than stock grants the options have to be ISOs, the spread on them has to be negligible or zero (to avoid a large AMT bill), the exercise cost has to be low enough that you are ok with handing over that amount of money up front, and you need to be able to actually hold the actual stock for long enough (at least 2 years from date of grant, and 1 year from date of exercise, to be counted as long-term capital gains). Note that on this last point if the company is acquired prior to that date you're likely SOL on the tax advantages. These days I much prefer RSUs. I've twice failed to reap the theoretical tax benefits from ISOs due to acquisition prior to the 2 year window, and I find RSUs much easier to reason about especially once option exercise costs become non-trivial (which is the case if you were to join many of the hot pre-IPO unicorns these days).