3 ms·
The 10-year exercise is such a no-brainer. Just ask yourself, startup founders & investors: when you issue stock options to your employees, do you want them to
by wannabenerd 8y ago
The 10-year exercise is such a no-brainer. Just ask yourself, startup founders & investors: when you issue stock options to your employees, do you want them to exercise them or not?
If not, then what you're really doing is offering something you hope doesn't cost you anything and is therefore worth nothing. Good luck to you.
If so, then do everything you can to help them do it. Holding an employee hostage because in order to leave they have to write a check for a significant part of their life savings won't be productive. They're taking up a salary from someone who will actually be engaged and motivated.
In my experience, this definitely plays into individuals' job offer decisionmaking. At least the most sophisticated ones, which are usually the ones you're most interested in recruiting.
- maconic 8y agoI don't agree with that... I would want all the early employees to be rewarded for taking a chance on that. I would want to go the other direction and give restricted stock (which can be early exercised) when the valuation is low and with less than 10 year vesting (such as the standard 4-year vesting with 1-year cliff), it's in the employees' best interests and costs the company nothing. Of course, down the road after later rounds the common stock valuation becomes prohibitively expensive and then it probably makes sense for stock options. But at least back in my day it seemed the common thing was to give restricted stock to founders and stock options to employees. Not sure if that's still a common thing or not?