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> Mr. Kupor notes that extending the exercise time for former employees makes their options more valuable at the expense of employees and investors. (It does so
by solidsnack9000 10y ago
> Mr. Kupor notes that extending the exercise time for former employees makes their options more valuable at the expense of employees and investors. (It does so because former employees have a longer time to exercise their options and dilute the other shareholders.)
This is simply a falsehood. Exercises of options of do not dilute shareholders -- new issuances do. Former employees do not issue new shares.
- argonaut 10y agoIt's not an outright falsehood. He's referring to the (correct, but also insidious) fact that compared to a 90-day exercise window, more people will end up exercising under a more extended window - and this will dilute. In other words, extended windows reduce the number of options returned to the pool, and are thus slightly dilutive.
- mavelikara 10y agoSo the dilution does not come from the exercise period; it comes from rank and file employees being unable to raise the required capital to exercise. So imagine if Kupor had said "We should not be paying employees any salaries; that puts cash in their pockets which enables them to exercise their options when they vest which leads to dilution for every investor" - that would have been an obviously ridiculous position. So is the statement OP is commenting on. On a side note, you have been defending Kupor in the other thread too with such nitpicks. Why?