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Startups indeed do not typically require employees to shell out hard cash for their equity, but one could argue that they're just extracting payment in employee
by arbuge 10y ago
Startups indeed do not typically require employees to shell out hard cash for their equity, but one could argue that they're just extracting payment in employee time instead.
- georgespencer 10y ago> one could argue that they're just extracting payment in employee time instead. Uh, they get a salary.
- db48x 10y agoBut usually a lower salary than otherwise.
- freddyc 10y agoAt almost every start-up that I've been involved with, the approach has been to grant employees ISOs which have a strike price (albeit very low) that the employee must pay if they want to exercise the options. They then have to run the AMT gauntlet and take on the potential tax risk. So while employees don't have to pay for the option itself, I'm not sure it's entirely accurate to say that employees don't have to shell out hard cash for the actual equity.