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I feel bad for the employees. Remember this is another risk when considering offers from startups. Your shares may be illiquid for a very long time.

• pm90 10y ago
  Why is it bad for employees? If they were granted stock, and the company thinks it will be a big player, then they have effectively invested in the company, right? Pretty sure a company like Dropbox has sizeable cash compensation for employees apart from equity. I guess I do see your point from a risks perspective. If I was an employee who cashed out because of IPO and invested all that money in index funds, then my risks would be greatly reduced.
  • sk5t 10y ago
    It's bad in the way that most illiquid investments are bad... you will have to wait an indeterminate amount of time to extract any (or possibly no) cash. Whether you want to reallocate that illiquid asset into an index fund or burritos, you can't.
  • hueving 10y ago
    Not being able to turn half of your compensation into actual cash that can be spent on things like rent/house down payments/etc is a major downside. It effectively extends the amount of time that the stock is worthless from the employees' perspective.