4 ms·
Equity is one area where I would encourage YC to get more involved. We need someone to step in and lobby the government for tax treatment of options that refle
by wtvanhest 10y ago
Equity is one area where I would encourage YC to get more involved. We need someone to step in and lobby the government for tax treatment of options that reflects their economic reality to early stage employees. We also need to encourage companies to use a 'standard' stock option agreement which is well known by everyone so that equity offers can be compared across companies.
If you take equity from an early stage company that has also raised a ton of money with a liquidation preference, what are your chances of getting paid out, even on a big exit? That question is basically impossible for most people out here to answer.
- cubano 10y agoIt wouldn't be very hard to collect existing data points and come up with a rough approximation, would it? I would think enough data now exists to allow such an analysis to have some idea of those numbers.
- wtvanhest 10y agoI doubt it. The past 5 years have been somewhat unique in that companies were given lots of cash with liquidation preferences and 'fake' valuations. A good example are T Rowe Price's 'unicorns': http://www.marketwatch.com/story/uber-airbnb-and-other-unicorns-have-valuations-cut-at-t-rowe-price-2016-04-15 http://www.marketwatch.com/story/uber-airbnb-and-other-unico... If UBER IPOs for any less than $12.5Bn, what will the early employees get? Probably not much compared with the value they helped create. Right now, that looks impossible, but who knows what will happen? My point is that there is not a historic president for what has happened in the private markets and I would do anything I could to cash out of equity if I held it in a unicorn and I was liquid. I would love to see YC step up and encourage founders to issue employee friendly stock options.
- wtvanhest 10y ago*precedent not president