4 ms·
Isn't there also Scenario C, where the investor invests $100k, employee gets a base salary of $100k and SBC of $100k? You've now got an extra $100k in the bank
by martinald 6y ago
Isn't there also Scenario C, where the investor invests $100k, employee gets a base salary of $100k and SBC of $100k?
You've now got an extra $100k in the bank for other requirements. Effectively the SBC makes the employee an investor also, exchanging labour for equity (instead of just for cash). This seems to me to be different. Obviously there is some dilutive effect to the share allotments, but especially in earlier stage non public companies you probably always want to have more non cash vs cash expenses if you have the option?
- roenxi 6y agoThat is identical to Scenario B - if the stock is actually worth 100k then they could have sold it for $100k and given the employee $200k as a base salary, while keeping the investor's money in the bank. Obviously there are some tax complexities in practice but in theory it balances out.