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I'm starting to have the feeling that those very early employees are about equivalent to an angel investor, and they should be getting some sort of angel invest
by mahyarm 10y ago
I'm starting to have the feeling that those very early employees are about equivalent to an angel investor, and they should be getting some sort of angel investor equivalent terms.
Otherwise once people really start realizing the negatives of being an early employee vs. founding your own startup it would be hard to hire otherwise.
- ska 10y agoOne way to do this with very early employees is to avoid the whole mess by just giving stock.
- sulam 10y agoYou'd still have to pay taxes on it as per your (audit-able) 409a valuation.
- ska 10y agoSure, depending on the country it works different ways. But if there is tax to pay, it is on a low valuation (very early, remember).
- argonaut 10y agoTo be fair, there is another catch-22, which is that a low valuation means the startup is early-stage, which means your options are worth less. So sure, you can early exercise, but there is a greater chance your early exercising will lose you money (if the options end up worthless).
- ska 10y agoNote I said "give stock", not "give options". Granted, this doesn't solve everything - it was an aside comment about early stage vesting (where liquidation events can be a long way off)
- argonaut 10y agoMy comment is equally valid if you replace "early exercise" with "paying taxes on" (assuming you do an 83b election).