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Startups should move to the 5 year exercise window. We've made this change at Ockam. Here's a list of companies with extended exercise windows https://github.c
by mattgreg 5y ago
Startups should move to the 5 year exercise window. We've made this change at Ockam. Here's a list of companies with extended exercise windows
https://github.com/holman/extended-exercise-windows https://github.com/holman/extended-exercise-windows
- sjburt 5y agoUnfortunately, if the window is larger than 90 days, they become NSOs and the difference between the strike price and the FMV is considered regular income, with withholding required immediately. You then have to pay capital gains when you sell, so you're actually taxed twice. This is not true with ISOs (it is considered income for AMT but that affects fewer people and you can get AMT credit to claw it back in future years). The tax laws around stock options really need to be reformed, they encourage employees to take on undue financial risk, especially for non-public companies.
- flashgordon 5y agoActually this is still better than options no? Paying capital gains in exercising options at some illiquid valuation is somethng I just can't see the justification behind. If the asset is paper money shouldnt the taxes also be paper money?