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> 2) Work for a company who you believe will have equity growth. There is a wide spectrum here between 5 person startup lottery tickets and established behemoth
by YokoZar 8y ago
> 2) Work for a company who you believe will have equity growth. There is a wide spectrum here between 5 person startup lottery tickets and established behemoth that have 0.5% YoY growth stocks. A good recent example of this is Square, which gave out equity grants that were something like 50% lower in cash value than the equivalent role's offer from a FAANG company (this is based off of personal anecdata). However, Square's stock exploded over the past year and that equity today outcompetes many of the equivalent FAANG-level offers. Of course, the opposite could have also been the case -- I've heard stories of underwater options being granted pre-IPO by Square. Sure, a few years later they're worth a lot, but at the time, employees weren't happy.
If you can already tell ahead of time which company's stocks are going up, just take more cash and use it to buy those stocks.
You can probably figure out why telling people to pick a single winning stock isn't good repeatable advice.
When you do get equity, sell your shares as soon as you're allowed. Don't bet on a single company more than you have to -- you're already staking a large chunk of your salary and career on them.
- njs12345 8y agoI agree in general with your comment, but.. > If you can already tell ahead of time which company's stocks are going up, just take more cash and use it to buy those stocks. These are pre-IPO companies so you can't easily buy their shares.
- JimboOmega 8y agoI'm curious, how often do post-IPO companies give options versus RSUs? I am used to thinking all public companies issue RSUs, but the last one I worked at didn't. My strike was at a relatively brief high point, and the value declined to about 2/3s of that before the company got acquired, but obviously those options were worthless - they wouldn't have been if they were RSUs.
- seattleeng 8y agoI agree with what you've written, and the phrasing I used was unclear. I was mainly making a note about joining a mid to late stage pre-IPO startup (series B or later) vs joining a large, low growth public company. You can't easily invest in most pre-IPO companies today (though with secondary markets growing in popularity this might change in 5 years). In the case of choosing between two large public companies, sure, take the cash & liquidate your positions as soon as you vest so you can stick them in SPY or vanguard.
- ndonnellan 8y agoRelated: https://blog.wealthfront.com/sell-employee-stock/ https://blog.wealthfront.com/sell-employee-stock/ TLDR: "When should you sell company stock? As soon as possible."