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> Note: stock options are not stocks. You're not given a share in the company, you're given the opportunity to invest in the company. You have to put money in t
by drexlspivey 6y ago
> Note: stock options are not stocks. You're not given a share in the company, you're given the opportunity to invest in the company. You have to put money in to _potentially_ get money back.
Stock options and shares are pretty much equivalent. If the stock price goes up the option goes up (by a ratio). You don’t have to put your own money in, i.e you get 100 options every quarter, you sell 50 of them to get the money to exercise the other 50.
- alpha_squared 6y ago> i.e you get 100 options every quarter, you sell 50 of them to get the money to exercise the other 50. And lose the opportunity at longer-term gains for the ability to afford the short-term cost. They're really not equivalent at all. I know they're billed that way, but there are very real reasons startups forgo IPO for so long and remain on the options track in the meantime. Startups can offer stocks and often choose not to.