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YMMV but you need to weight up your current and near term needs versus long term payoff, including the likelihood of exit within your preferred timeframe. If y

by iuguy 16y ago

YMMV but you need to weight up your current and near term needs versus long term payoff, including the likelihood of exit within your preferred timeframe. If you genuinely believe that you will exit within a reasonable timeframe because of the company's value and ability to sell at the time, consider the equity. If you need the cash for day to day, or you have any doubts about whether or not you're going to exit on time (or indeed if at all) then take the cash. Personally in your situation given it's half a percent and a 10k a year difference, unless that half percent gives you a substantial change in shareholder status (e.g. 50 vs 50.5%) I'd take the cash. It's unlikely that half a percent is going to make more than 10k a year's worth of difference over your company's lifetime, compared to that extra 10k early on.

carbocation 16y ago
> It's unlikely that half a percent is going to make more than 10k a year's worth of difference over your company's lifetime, compared to that extra 10k early on. It is possible that you are right. But it is also possible that this person is working at a near-IPO company or something well funded. In that case, the 0.5% would be much more meaningful. In the end, I suspect that the most likely scenario is that insiders consider the expected value of the 0.5% to be almost exactly equivalent to $10k/year after accounting for risks. In that case, I would personally consider how much of a relative difference would that 0.5% make (e.g., going from 0.75% to 1.25% might be more meaningful than going from 23% to 23.5%) vs how much of a difference would that $10k make. Presumably people who have thought about this consider them to be equivalent from the company's perspective, but only the asker knows which one is more useful to him/her. If he/she has doubts about the company's exit (as you suggest), taking the money makes sense. If he/she is confident and can delay the payoff, it may be worth it. Hooray, gambling.

by iuguy 16y ago

carbocation 16y ago

> It's unlikely that half a percent is going to make more than 10k a year's worth of difference over your company's lifetime, compared to that extra 10k early on. It is possible that you are right. But it is also possible that this person is working at a near-IPO company or something well funded. In that case, the 0.5% would be much more meaningful. In the end, I suspect that the most likely scenario is that insiders consider the expected value of the 0.5% to be almost exactly equivalent to $10k/year after accounting for risks. In that case, I would personally consider how much of a relative difference would that 0.5% make (e.g., going from 0.75% to 1.25% might be more meaningful than going from 23% to 23.5%) vs how much of a difference would that $10k make. Presumably people who have thought about this consider them to be equivalent from the company's perspective, but only the asker knows which one is more useful to him/her. If he/she has doubts about the company's exit (as you suggest), taking the money makes sense. If he/she is confident and can delay the payoff, it may be worth it. Hooray, gambling.