3 ms·

I am curious to know when is the best time to ask all the questions about the stock options. Before signing the offer letter / getting started or after? Before

I am curious to know when is the best time to ask all the questions about the stock options. Before signing the offer letter / getting started or after? Before may be a bad deal for startups, especially the ones that are keeping everything all the equity details under wraps. After is a bad deal for the employee who makes the move, and could be a major bait and switch

bretthoerner 10y ago
Always before. If they won't tell you the details of your compensation you need to run, not walk.
patio11 10y ago
If you don't know (minimally) the fully diluted count of shares in the company, your option grant is as specific is saying that your salary will be denominated in dollars and you'll be given more detail about it sometime after joining the company, pinky-swear. A company which won't provide enough information to value an option grant contemporaneous with the written offer is being either abusive or stupid. There exist employment opportunities at companies which are neither abusive nor stupid. Take one of those instead.
- calvinbhai 10y ago
  Thanks! My first two startup jobs, were purely based on the number of options. Fortunately, my current one gave me enough insight about it before, and much more in depth after. There's so much to know about how options work, most people dont realize when moving to a startup job for the first time!
- crzwdjk 10y ago
  Sounds like I was right to pass on the company that promised me "4000 options" and insisted that any details beyond that were strictly confidential and could under no circumstances be disclosed to any non-employees. It seemed especially suspicious in conjunction with the rest of their attempts at hard-sell tactics that just left a bad taste in my mouth.
  - st3v3r 10y ago
    If they don't trust you enough to keep that information confidential, then why are they extending an offer to you at all?
  - rmc 10y ago
    If they really want it to be confidential, you could tell them that you'd be willing to sign an NDA. And see if they tell you. :P
birken 10y ago
Certainly before signing the offer letter. I created a website, Friendly Options [1], to act as a helpful ally is trying to extract this information from employers. It asks for a bunch of required information (# of total shares, strike price, share expiration, etc) and then breaks down your option grant in terms and scenarios that are easy to understand. If an employer isn't forthcoming about something you can just say "Look, this website is asking for it and that is why I need it". Just because a company isn't forthcoming about all the stock option information doesn't mean that startup is unilaterally bad, in some cases the founders are just naive and don't really understand the complexities of your stock options vs their founder stock. However, if you ask the employer for the necessary information to fill out the website and they won't give it to you, then you essentially have no way to value the stock options and the only rational thing to do is value them at $0. Many people just value stock options at $0 anyways and I don't agree with that. Stock options can be valuable (for example I've made much more money from startup stock options than from salary). However, if you don't have the full information about the stock options you are receiving you can't understand the risk you are taking and the potential rewards you might get. 1: http://friendlyoptions.org/ http://friendlyoptions.org/
- calvinbhai 10y ago
  wow thanks! This is exactly what I was actually looking for.
st3v3r 10y ago
Before. Always before. It really should not matter to you if it's a "bad deal for startups," as you're not a startup, you're a person with a family to house and feed.
hkmurakami 10y ago
Before. At the very least you'e getting a read on their character. Anything and everything in the contract can be taken away from you when you don't have a controlling stake in the company. The contract language is important, but the trustworthiness of the founding team is even more important. At the end of the day, if they are intent on screwing you over, your contract will be just a piece of paper anyways. By asking for the information up front, you get additional information on the trustworthiness and openness of the management team.

bretthoerner 10y ago

Always before. If they won't tell you the details of your compensation you need to run, not walk.

patio11 10y ago

If you don't know (minimally) the fully diluted count of shares in the company, your option grant is as specific is saying that your salary will be denominated in dollars and you'll be given more detail about it sometime after joining the company, pinky-swear. A company which won't provide enough information to value an option grant contemporaneous with the written offer is being either abusive or stupid. There exist employment opportunities at companies which are neither abusive nor stupid. Take one of those instead.

calvinbhai 10y ago
Thanks! My first two startup jobs, were purely based on the number of options. Fortunately, my current one gave me enough insight about it before, and much more in depth after. There's so much to know about how options work, most people dont realize when moving to a startup job for the first time!
crzwdjk 10y ago
Sounds like I was right to pass on the company that promised me "4000 options" and insisted that any details beyond that were strictly confidential and could under no circumstances be disclosed to any non-employees. It seemed especially suspicious in conjunction with the rest of their attempts at hard-sell tactics that just left a bad taste in my mouth.
- st3v3r 10y ago
  If they don't trust you enough to keep that information confidential, then why are they extending an offer to you at all?
- rmc 10y ago
  If they really want it to be confidential, you could tell them that you'd be willing to sign an NDA. And see if they tell you. :P

birken 10y ago

Certainly before signing the offer letter. I created a website, Friendly Options [1], to act as a helpful ally is trying to extract this information from employers. It asks for a bunch of required information (# of total shares, strike price, share expiration, etc) and then breaks down your option grant in terms and scenarios that are easy to understand. If an employer isn't forthcoming about something you can just say "Look, this website is asking for it and that is why I need it". Just because a company isn't forthcoming about all the stock option information doesn't mean that startup is unilaterally bad, in some cases the founders are just naive and don't really understand the complexities of your stock options vs their founder stock. However, if you ask the employer for the necessary information to fill out the website and they won't give it to you, then you essentially have no way to value the stock options and the only rational thing to do is value them at $0. Many people just value stock options at $0 anyways and I don't agree with that. Stock options can be valuable (for example I've made much more money from startup stock options than from salary). However, if you don't have the full information about the stock options you are receiving you can't understand the risk you are taking and the potential rewards you might get. 1: http://friendlyoptions.org/ http://friendlyoptions.org/

calvinbhai 10y ago
wow thanks! This is exactly what I was actually looking for.

st3v3r 10y ago

Before. Always before. It really should not matter to you if it's a "bad deal for startups," as you're not a startup, you're a person with a family to house and feed.

hkmurakami 10y ago

Before. At the very least you'e getting a read on their character. Anything and everything in the contract can be taken away from you when you don't have a controlling stake in the company. The contract language is important, but the trustworthiness of the founding team is even more important. At the end of the day, if they are intent on screwing you over, your contract will be just a piece of paper anyways. By asking for the information up front, you get additional information on the trustworthiness and openness of the management team.