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> So if you’re granted 1% shares and the company grows from 100m to 200m on liquidity, you’re entitled to 1m. It avoids you having to front money for stock opti
by thomasahle 6y ago
> So if you’re granted 1% shares and the company grows from 100m to 200m on liquidity, you’re entitled to 1m. It avoids you having to front money for stock options, and it also avoids the tax burden b/c when issued, the shares are worth zero dollars
Isn't that just like normal stock options?
- konschubert 6y agoIt appears to simulate the normal stock options. Seems to be motivated by tax reasons. I think I've seen this called a "virtual option plan".
- londons_explore 6y agoIt might behave differently to dilution too...
- rutthenut 6y agoThe 1% options would be one percent of shareholdings at the time the option was offered. With more shares created/sold later, the dilution means when the options mature, they will be less than 1% of the total company shareholding, or value.