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I will not exercise my Gitlab stock options (2017)
- beervirus 5y agohttps://techcrunch.com/2021/10/13/gitlab-raises-ipo-range-targeting-valuation-of-as-much-as-11b/ https://techcrunch.com/2021/10/13/gitlab-raises-ipo-range-ta... Whoops! That was… foreseeable.
- karaterobot 5y agoIn hindsight maybe. Can you foresee what the next 150 person company that will IPO in 4 years is?
- rvz 5y agoHopin. [0] [0] https://hopin.com https://hopin.com
- mkmk 5y ago"Even if I only had to pay the $4,050 to buy the stock options, I would not do it. I would rather invest this money on myself, and my family. I would even prefer to buy Bitcoins for that amount, than to invest it in GitLab." Which would have been the better investment?
- compiler-guy 5y agoWhich would have been the better *risk adjusted* investment. It's easy to say in hindsight that it would have been a good choice, but far harder to know in the moment. Startups fail all the time, including YC ones.
- rossmohax 5y agoIn 2017 Gitlab was already gaining traction, it the very least it would be bought by some private equity firm.
- deleted 5y ago[deleted]
- nzmsv 5y agoNaively: the price of Bitcoin on April 3 2017 when this blog post was published was around $1100, so the author could have bought 3.68 BTC with his $4050. Even if he sold BTC at the all-time peak of $64863 he'd only make a third of what GitLab options would make.
- fishtoaster 5y agoLooks like opened at $1,318 on the day this was written. If you invested $4,050 on that day into 3.07 bitcoins, you'd have $174,819 today, which seems well less than Gitlab stock, which others are saying would be worth near a million. That said, if you'd invested $4k on a couple winning horses at Golden Gate Downs in 2017, you could also be a millionaire, so this sort of backwards-looking estimate is of limited value. :)
- tootie 5y agoGitlab hasn't actually gone public yet and he could still hold his shares indefinitely (if he had them) but they are looking to open at $66-69 a share and his price was $0.27. So roughly 250X.
- hnuser847 5y agoSorry, this is totally insane. The author said the strike price on his options is $0.27. Gitlab is preparing to IPO at about $66, which would make his 15,000 shares worth nearly $1 million. He's going to throw that away because he's disgruntled with the company? https://www.sec.gov/Archives/edgar/data/0001653482/000162828021019932/gitlab-sx1a2.htm https://www.sec.gov/Archives/edgar/data/0001653482/000162828... Edit: I thought this was a recent post, didn't realize this was from 2017.
- beervirus 5y agoThe post is from April.
- deleted 5y ago[deleted]
- rvz 5y ago...in (2017) before leaving GitLab. Tomorrow on the 14th of October 2021, GitLab is going to the public markets and will be priced around $60 - $66 a share. So this person threw away his $1m worth of stock options because of GitLab's culture. Oh dear.
- compiler-guy 5y agoThat's easy to say in hindsight, but most startups fail.
- bpodgursky 5y agoEhhh but... $4,000 to exercise the shares? You have to be REALLY REALLY confident a startup is going to 100% no-soft-exit fail to not take that bet, given the vastly positive payout even an acquihire exit would give, given how cheap that strike price is.
- plorkyeran 5y ago
- oh_sigh 5y agoExercising options isn't "investing in the company" if you immediately sell the shares acquired by exercising, assuming that is possible. In fact, it is worse for the company if you do that, so OP should do it(and make a bunch of money for themselves). If Gitlab IPOs at $66/share, that means the author will get almost $1M from selling their shares they acquired for $0.27.
- compiler-guy 5y agoIt wasn't possible for him four years ago.
- ansible 5y agoThe article is from 2017, so the author didn't have the option to immediately liquidate the shares. Gitlab didn't appear to be close to a buyout or IPO at that point from what the author knew.
- deleted 5y ago[deleted]
- compiler-guy 5y agoIt's really, really hard to know what your options will be worth years into the future. You make the best decision with the information you have available at the time. A cold-hearted, unemotional, calculation might have led him to a different conclusion four years ago--cheap options are very cheap, so the risk is low. But it is very hard to know that. And if a company has done you wrong, not giving it any more money, time, and emotional investment can be worth a lot of money to you.
- lavezza 5y agoDirt cheap options can be very expensive. The AMT tax can kill you.
- nwatson 5y agoThat's why, if you can, exercise options before they vest. I bought 3 years of my 4 year initial allocation at my current startup a month after the grant was issued (four months after I joined). I bought at $0.00 gain per share, meaning no tax hit. (Just file that 83(b) form.) The tax if exercising at this point two years down the road might have hurt.
- lavezza 5y agoI'm not sure if we were able to purchase before vesting. I'm assuming if you left the company the money for any unvested shares would be refunded?
- nwatson 5y agoWhen you leave the company can choose to buy back (essentially refund you for) unvested shares, in which case they take back the unvested shares. I imagine any company doing well will buy back the unvested shares. If the company needs the cash more then maybe they'll let you keep the unvested shares, but since your usually-Common-Stock strike price is typically a lot less than what investors will pay for their Series-X shares it's likely they'd rather take back the Common Stock (?) even in cases of one or more transpired or likely down rounds (?).
- ljm 5y ago> It’s been a couple of months since I was fired from my job as a Backend Developer at GitLab As far as I understand it, you don't usually get to keep your options when you're fired. Rest of the post? Disgruntled employee trying to spin "I was fired!" into "I quit!"
- fishtoaster 5y agoThat's only the case if you're fired "for cause" which is a legally-meaningful term that's pretty rarely used unless you beat up the CEO on camera while snorting cocaine off a pile of embezzled $20s. If you're just let go normally (even if it's for being bad at your job), it's not usually "for cause" and you have 90 days to exercise your options (or longer if they're NSOs instead of ISOs).
- jollybean 5y agoSure you do. They were part of your comp before you were fired, not after. Generally they're yours.
- ljm 5y agoDepends on the nature of the dismissal. In the UK, if you are fired for gross misconduct then you forfeit everything. I think in the US that being fired 'for cause' is similar to this, but perhaps not as strong as the allegation of gross misconduct. Is gross misconduct present in this article? I can't say. But the author does not paint a positive image for themselves. I don't really sympathise with the author, either. He's just boasting about money on the table that he could afford to say no to. He's an asshole, I don't care for him. Perhaps Gitlab fired him because he was a jerk. Who knows, who cares.
- outworlder 5y agoMost employment in the US is 'at will'. You do not need a cause.
- avgcorrection 5y agoGiven how terrible labor laws are for employees in the US, I would never assume anything negative about an American based on the mere fact that they were fired from some job. Being a Fired American isn’t some stigma that one needs to “spin”.
- MAGZine 5y agoThey recommend you split 10% across the first 10 employees. it's not 10%/10 = 1% each. The earliest engineers get more, the later engineers get less.
- the-dude 5y agoSo was he an employee or a contractor? At the end of the post he claims to have been a contractor.
- kevinmchugh 5y ago> I would never invest in a company that: > It’s just starting to grow in its market Then you should not work at one. Genuinely. The only way comp makes sense at a startup is if you think the equity will end up valuable. Most people who believe this will be wrong, so you have to really believe that you're the exception. If you don't, it makes a lot more sense to work somewhere that's already found product-market fit. Your labor is an investment that's very difficult to diversify. > Treats its employees the way GitLab treated me This is tough, but I know people who exercised shares after being fired, and then saw those shares become valuable. How do you decide that you being fired doesn't signify the company having lost its way? How do you hold the idea that you were fired and it's bullshit at some level, but the company will still do well and you can make money? I don't know, it's hard. You should think very hard about this, if you're in this position.
- kevin_thibedeau 5y agoWhen a startup has $500M in runway and the devs are taking in more than a median salary why must equity stakes be a requirement?
- Ancapistani 5y ago"Salary" is not "total compensation". IMO, part of working for a startup is accepting the risk/instability. Another part is taking on responsibility at a much faster rate than you otherwise would. That's typically compensated via equity.
- kevin_thibedeau 5y agoHow is a startup with 5 years of runway riskier than a non-startup with $100M revenue? The only difference is that the money comes from sugar daddies rather than paying customers. In the olden days working for a startup entailed below market pay and equity was the reward for slogging it out.
- deleted 5y ago[deleted]
- staunch 5y agoThe 90 day stock options exercise window should be made illegal. It should be 10 years or indefinite. Employees, like the author here, earned their stock options. It's wrong that they get stolen back just because its an "industry norm" established by greedy assholes in the 1980s. The author of this post played an important role in GitLab's early development. They deserve to have their $1 million payday now that it is public, regardless of how they felt in the months after being fired. They were robbed by GitLab's unethical stock options terms. Employees also get screwed when they, under time pressure, exercise stock options which then go on to be worthless. And when they simply can't afford to exercise options. It's a huge flaw in the current startup system. It would be great if YC used its muscle to actually fix this problem. Startup employees are getting screwed by this every day, in many cases by YC companies.
- TuringNYC 5y agoCould anyone clarify if the 90 day window is driven by tax regulations or driven by private company conventions?
- bpodgursky 5y ago> And when they simply can't afford to exercise options. fwiw if anyone is ever in this spot personally... there are almost always VCs/banks/investors/coworkers willing to front the cash to exercise options in exchange for some upside on the potential gain (I think there are entire startups based on this premise?). It's def worth asking around.
- stuff4ben 5y agoThis further reinforces my dislike for Gitlab the company. This is not the first insight into the company culture and they seem shady overall. Kinda like an evil little brother who'll never be as good as their big brother. Now Gitlab the open source tool was pretty nice back when I used it half a decade ago. Was much better than using that monstrosity called Gerrit. But nowadays I just use Github and don't even think about it anymore. They've won, kinda like Kubernetes vs Docker Swarm.
- t0mbstone 5y agoKeep in mind that this article was posted 4 years ago, and if the butthurt author had actually exercised his $4K worth of options, he would be a millionaire now.
- Gortal278 5y agoHilarious!
- tschellenbach 5y agoTL/DR: It's really hard to evaluate if a startup is succeeding or not :) He got a generous equity grant for one of the hottest companies and chose not to exercise them. This happens all the time.
- rossmohax 5y agoWhy did it disappear from the frontpage?
- zeeshanejaz 5y agoThis logic didn't make much sense to me. If banana-mobile company treated me badly and didn't replace my water-damaged mobile, I wouldn't throw away its shares because I am disgruntled. How a company treats me as a customer, or an employee, has nothing to do with how I see it as an investment.
- Charles888 5y agoThe stock has been split 1 to 4 during 2018, so his 15k share is 60k shares actually. If he keep the option and sell it today, he will make 6 millions now.