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But what advice would you give someone who has an offer from Uber/Airbnb/Dropbox/Pinterest/Palantir? They're derisked to the point where the RSUs/options should

But what advice would you give someone who has an offer from Uber/Airbnb/Dropbox/Pinterest/Palantir? They're derisked to the point where the RSUs/options should have some value, and their offers to employees definitely reflects this. Wasn't there a post here recently about one of those companies having restrictions that made it more-or-less impossible to cash out your equity if you ever left?

pyb 10y ago
Uber
- linkregister 10y ago
  For options employees; RSU employees don't have the 90-day expiration. It is pretty egregious that options employees are in that predicament. Edit: please correct my fact or otherwise respond. If I am incorrect I'd like to know; the drive-by downvote doesn't help.
  - hkmurakami 10y ago
    Is the options employees vs RSU employees distinction simply dependant on their join date? (before and after the company switched from options to RSUs) This is fascinating because at other companies, you can easily have the opposite: A company goes from having option with an extended option exercise period (say 2, 7, 10 years) to RSUs. The RSUs, whether they are on a delayed vesting with handoff when employee leaves, or outright confiscation upon departure, are both worse than the options scenario.
    - linkregister 10y ago
      I'm guessing it's dependent on join date. I'll ask my friends. The scheme with Uber is the options can be exercised up to 90 days after departure, but the RSUs are held until IPO, at which the employee/former employee takes possession of them and is responsible for paying taxes on the income. Secondary share sales are essentially prohibited, only being authorized if the board approves them. Illiquid until IPO.
hkmurakami 10y ago
There are variants I've heard regarding illiquid RSU treatment. 1) Regular RSU vesting schedule. You'd get a tax hit on illiquid equity (I've never heard this happen at late stage startups so far). 2) RSU vesting is delayed until IPO. If you leave before IPO, you lose all your equity. 3) RSU vesting is delayed until IPO. If you leave before IPO, you get the equity you have vested on paper so far. You will owe ordinary income tax on the shares. "more-or-less impossible to cash out your equity" seems to be somewhere in between (2) and (3). I'm interested to read the exact legal language used in the contract, if anyone can find said post.

pyb 10y ago

Uber

linkregister 10y ago
For options employees; RSU employees don't have the 90-day expiration. It is pretty egregious that options employees are in that predicament. Edit: please correct my fact or otherwise respond. If I am incorrect I'd like to know; the drive-by downvote doesn't help.
- hkmurakami 10y ago
  Is the options employees vs RSU employees distinction simply dependant on their join date? (before and after the company switched from options to RSUs) This is fascinating because at other companies, you can easily have the opposite: A company goes from having option with an extended option exercise period (say 2, 7, 10 years) to RSUs. The RSUs, whether they are on a delayed vesting with handoff when employee leaves, or outright confiscation upon departure, are both worse than the options scenario.
  - linkregister 10y ago
    I'm guessing it's dependent on join date. I'll ask my friends. The scheme with Uber is the options can be exercised up to 90 days after departure, but the RSUs are held until IPO, at which the employee/former employee takes possession of them and is responsible for paying taxes on the income. Secondary share sales are essentially prohibited, only being authorized if the board approves them. Illiquid until IPO.

hkmurakami 10y ago

There are variants I've heard regarding illiquid RSU treatment. 1) Regular RSU vesting schedule. You'd get a tax hit on illiquid equity (I've never heard this happen at late stage startups so far). 2) RSU vesting is delayed until IPO. If you leave before IPO, you lose all your equity. 3) RSU vesting is delayed until IPO. If you leave before IPO, you get the equity you have vested on paper so far. You will owe ordinary income tax on the shares. "more-or-less impossible to cash out your equity" seems to be somewhere in between (2) and (3). I'm interested to read the exact legal language used in the contract, if anyone can find said post.