Your odds of making significant money off stock options are far higher than the lottery. I know no lottery winners, but i know a half dozen former coworkers who

Your odds of making significant money off stock options are far higher than the lottery. I know no lottery winners, but i know a half dozen former coworkers who became millionaires through stock options, and dozens who’ve made hundreds of thousands. On the contrary, employees are far better suited to value options than journalists. Journalists can’t value options because these companies are private, they can’t know average option grant, vesting period, strike value, total share count, company fair market value, etc, etc. They have no way of comparing the typical option value in silicon valley to other businesses, they can only compare cash comp. Employees can know what their companies last valuation was, what about yay means per share, and reasonably estimate it’s future value if it succeeds, and roughly estimate how likely that is. If you think you need $150K in silicon valley to match the $85K you make in the heartland, if some silicon valley company offers you $150K plus 1% of the company you don’t know exactly how much the stock is worth, just that its a lot. For example a simple calculation goeslike this. Let’s say you think it’s a 1 in 10 shot get company succeeds, and it will be worth on average $400M if it does. That’s means $4M for you if it does or $1M a year, assuming vesting over 4 years. The 10% chance of success says you be zero most of the time, but your options value still works out to be worth an average value of $100K/year. So when a journalist says engineers who make $150K in SV would have a higher standard of living in the heartland making $85K, that’s because they don’t have a clue what those options are worth.