4 ms·
I really don't understand why employers don't allow the employees to exercise the options right in the beginning when the value is much much lower.
by tn13 10y ago
I really don't understand why employers don't allow the employees to exercise the options right in the beginning when the value is much much lower.
- nulltype 10y agoUsually you are allowed to exercise the options as soon as they are vested.
- xiphias 10y agoI really don't understand why good employees work in startups instead of going to an IPO-ed company. Most of the time in the current climate they are worse off.
- palakchokshi 10y agoAsk the good employees of Facebook, Google, AirBnb, etc. who joined those companies early on. The upside for the employees where the company IPO-ed is just insane. Another reason might be the product/technology that the startup is working with that might be of interest to a good employee. Money is not everything.
- spinlock 10y agoI've asked them. To a one, they got lucky. None of them had an actual plan for how their contribution would lead to a multi-billion dollar exit.
- rhizome 10y agoPublic companies can be a drag.
- ropiku 10y agoIf you are talking just about $ then totally but there's more than just money. Big companies have bureaucracy, corporate politics, etc.
- xiphias 10y agoI'm working at one of those companies and I prefer the bureaucracy and real big data & machine learning over iterating on the web platform (Rails, Javascript, Angular...). With small companies it felt like I had to create features after features, but as there were not many users, I didn't have the same impact (number of users * $/user earned for the company)
- tn13 10y agoI must second you here. Many times the stock options that you get at Google, or Facebook even today outperform all other forms of investment.
- spullara 10y agoMany companies allow you to exercise your options and file an 83b election with the IRS. This only really works well though for the earliest employees because valuations often go up so fast that the exercise prices becomes prohibitive a year or two in. Then later, if your price is low and the stock price is high, exercising becomes cost prohibitive on the tax side where you pay taxes on the difference (AMT) even though you can't sell the stock. It is complicated issue but at its core is the IRS IMHO.
- fragsworth 10y agoEmployers need to get an independent valuation prior to issuing options. If you're hiring employees at a later stage, your hands are tied.