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I've worked for two startups. In both cases, one of the defining factors in choosing the particular startups that I work for was that the founders were very em
by morgante 10y ago
I've worked for two startups.
In both cases, one of the defining factors in choosing the particular startups that I work for was that the founders were very employee-friendly.
In both cases, I was granted actual stock (ie. not options).
In my view, options (as typically offered) are basically useless as compensation. They have a strike price which isn't much lower than the price investors last bought stock at. Companies which offer these as a substantial component of compensation are essentially exploiting the naivety of employees and expecting them to value "ownership" more heavily than investors do, despite having much less favorable terms.
Risk appetite is not the issue.
- mavelikara 10y agoThey have a strike price which isn't much lower than the price investors last bought stock at. Why is this so? I recently became aware of a case where the Fair Market Value of the common stock was only about 7% lower than what the last round of investors paid - preferred stock which, it was rumored in the press, came with a ratchet. My impression was that the original thesis of the employee options were that common stock is marked down to a significantly lower price than the preferred stock.