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I'm not saying you're wrong at all -- most typical startup ISO offerings suck and are not good situations for employees. That said, as a founder who custom des
by jaz46 7y ago
I'm not saying you're wrong at all -- most typical startup ISO offerings suck and are not good situations for employees.
That said, as a founder who custom designed our stock plan to be as employee-friendly as we could, there is a better way when actually done right and not just "following the standards".
Stock plan improvements like super long post-termination exercise, offering RSAs instead of just stock options, and most importantly in my opinion, adequately educating your employees on the risks and return possibilities of their equity!
It is irresponsible and manipulative. IMO, for a company to say, "we're giving you X shares worth Y dollars now and it might go up way more than that." While many employees' eyes will glaze over a bit if you start citing tax code, helping them get the basics and fully internalize the risk/reward tradeoff is both doable and necessary!
Equity can be a really valuable part of early employee equity and it's just as much of a peeve of mine to hear people say it's worth $0/lottery as to hear companies oversell the startup dream.
- choppaface 7y ago> It is irresponsible and manipulative. IMO, for a company to say, "we're giving you X shares worth Y dollars now and it might go up way more than that." That’s why it’s illegal to tell an employee (or any potential investor) that their X shares are worth $Y. You must give a 409a valuation or some other evidence to supplant the valuation, and you must clearly state what percentage the share represents (or disclose total number of shares). Misleading and false financial claims are fraud.