3 ms·
That’s perfectly legit but in my experience uncommon. I’ve often seen 1/x per year for x years (like 25% after 1 year for 4 years). It’s also common to vest a p
by matt_the_bass 9y ago
That’s perfectly legit but in my experience uncommon. I’ve often seen 1/x per year for x years (like 25% after 1 year for 4 years). It’s also common to vest a portion immediately like 20% immediately. Then 20% each year for 4 years.
Note that generally employees only have 30 days to convert if they leave. So even if options are vested, how likely will they convert if they leave within a short period even if some are vested immediately? If the employee thinks the company is so awesome that they should convert options, then why would they leave so soon?
I’ve usually seen vesting periods of 3-5 years total.
Note there is nothing stopping you from having multiple grants simultaneously. Ie you get these options now as part of this deal. Then sometime in the future before the originals are all vested you can get another grant.
Lastly, if this is really early stage what is the likelihood that they will be worth anything ever? Perhaps you should optimize on cash.
- m3t4lh3ad 9y agoThanks for your thoughts. The cash component doesn't worry me at this stage and you're right, the options basically aren't worth anything initially. That said, there are many things that can cause someone to leave a company: pressed for cash, overseas family in need, not getting along with the team, etc... Should something like this happen, I would leave after having invested 1, 2 years into the startup without having had the chance benefit from what I helped build. Lastly, it's not really about the grant per se. It's a startup. The odds aren't in our favor. But it's more about what is fair - it seems fair to me to reward employees for their efforts without such a long cliff. Thanks again!
- matt_the_bass 9y agoI agree 100%. Fareness is important. As is enjoyment. Good luck!