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I worked at a pre IPO company a few years ago and it was an exception to find people who understood how things worked. Hell, even I missed some details back the

I worked at a pre IPO company a few years ago and it was an exception to find people who understood how things worked. Hell, even I missed some details back then, and it was only after I put in hours of research that I developed a decent grasp of the tradeoffs and deadlines. I still don't really know how to do AMT though. There are a couple of startups that make it a point to early through what their equity means with new hires. But this puts power into the hands of employers since some will be well meaning and some will mislead. It's unfortunate that we don't have a "yo-yo" knowledge with a easy to remember URL we can point to. Plenty of great articles out there, including by prominent VCs. But it requires a lot of digging.

JonFish85 10y ago
>It's unfortunate that we don't have a "yo-yo" knowledge with a easy to remember URL we can point to. Plenty of great articles out there, including by prominent VCs. But it requires a lot of digging. This seems impossible; stock options just aren't simple. There is no way for most employees to get enough information in a reasonable amount of time to make an accurate estimate of their stock options' worth. Employees probably aren't privy to bank loan terms (e.g. converted to preferred shares in certain conditions, over time). They aren't privy to the preferred share terms (past, current or future). In the case that an employee has to purchase their shares prior to a liquidity event, they have no way to know what the future holds in terms of dilution. It's an exercise in futility. Even if you make logical guesses, guesses are worth very little. If the economy tanks, and suddenly there's a cash crunch, your best guess may not apply. Even if things go WELL (but not smashingly well), you can get screwed by weird preference issues, dilutions or other shenanigans that weren't public knowledge that kick in. An option to buy stock puts you last in line for money. If everyone else gets paid (vendors, banks, VCs and founders), you'll get a share of what's left (after a lock-up period). There's no good way to know what that's worth.

JonFish85 10y ago

>It's unfortunate that we don't have a "yo-yo" knowledge with a easy to remember URL we can point to. Plenty of great articles out there, including by prominent VCs. But it requires a lot of digging. This seems impossible; stock options just aren't simple. There is no way for most employees to get enough information in a reasonable amount of time to make an accurate estimate of their stock options' worth. Employees probably aren't privy to bank loan terms (e.g. converted to preferred shares in certain conditions, over time). They aren't privy to the preferred share terms (past, current or future). In the case that an employee has to purchase their shares prior to a liquidity event, they have no way to know what the future holds in terms of dilution. It's an exercise in futility. Even if you make logical guesses, guesses are worth very little. If the economy tanks, and suddenly there's a cash crunch, your best guess may not apply. Even if things go WELL (but not smashingly well), you can get screwed by weird preference issues, dilutions or other shenanigans that weren't public knowledge that kick in. An option to buy stock puts you last in line for money. If everyone else gets paid (vendors, banks, VCs and founders), you'll get a share of what's left (after a lock-up period). There's no good way to know what that's worth.