5 ms·

Yes, with SharesPost, equityzen and Forge. Company had a pretty standard policy so approval was straightforward but took a few months and required some legal op

Yes, with SharesPost, equityzen and Forge. Company had a pretty standard policy so approval was straightforward but took a few months and required some legal opinions (costing $,$$$). In my case the deal was for the shares directly. Biggest lesson was really just that the fees really added up (near 10% if under $100k) and it’s a shame more companies don’t do more to broker these deals on employees behalf to get the best price and cut out the middlemen (another employer did this and it was great). DM if I can help with more info, experience with each company was essentially the same and you should just reach out to all of them to see who has inbound buy requests at the highest price. Worth noting that there is more room for negotiation on price than you might expect.

secondarymarket 5y ago
Ah, interesting that your company had a standard policy for this. I wish mine did as well. Worried about getting (or even asking for) board approval - what incentive would they have to allow an employee to reduce their stake in the companies success prior to an IPO event?
- bb88 5y ago
  Owning shares in a pre-ipo company comes with it's own risks. And not wanting to be diluted from future investments is a valid reason to selling your shares. It's possible for the company to dilute your shares turning them worthless, and then generates new shares. I'm sure there's lots of examples you can find of dilution, but that was what FB did to the former CFO as shown in the movie "The Social Network". People keep talking about working for soulless companies when deciding to work for startups, but I can't think of a more soulless way to screw over your employees.
  - mateo411 5y ago
    It's true that the company might dilute your shares, but that also dilutes everybody else's shares too. The greatest risk is the company won't be successful and your shares will be worthless.
    - bb88 5y ago
      I think you missed the point about issuing new shares. Everyone doesn't end up diluted in that case.
    - s1artibartfast 5y ago
      It happens. I've herd it referred to as a cram down +pull through. There are lots of ways to top people up after dilution. Example: Cap table: Founder 10%, ex-employees 10%, VC 80% Step 1) Company takes a down round, VC put some small money in, dilutes everyone 10:1. Step 2) New stock plan with 10% for founder Cap table: Founder 11%, ex-employees 1%, VC 88% Step 3) Founder and VC high-five
      - HWR_14 5y ago
        Isn't that something the exemployee would be able to sue over? Like, it's clearly fraudulently done to steal their equity.
        bb88 5y ago
        Yes, but you have to sue over it. For most people, it's probably not worth it. Besides, since it's a private company, equity is what the board/executives say it is.
        HWR_14 5y ago
        > Besides, since it's a private company, equity is what the board/executives say it is. Can you clarify that?
        s1artibartfast 5y ago
        Maybe they meant valuation is what the board say it is
        s1artibartfast 5y ago
        Dilution is extremely common and a lot of this funding stuff comes down to businesses strategy. My example was extreme, but there is tons of gray area for this kinda thing
wikibob 5y ago
No DMs on HN. Add your email address to the About Me section if you want to be reachable.

secondarymarket 5y ago

Ah, interesting that your company had a standard policy for this. I wish mine did as well. Worried about getting (or even asking for) board approval - what incentive would they have to allow an employee to reduce their stake in the companies success prior to an IPO event?

bb88 5y ago
Owning shares in a pre-ipo company comes with it's own risks. And not wanting to be diluted from future investments is a valid reason to selling your shares. It's possible for the company to dilute your shares turning them worthless, and then generates new shares. I'm sure there's lots of examples you can find of dilution, but that was what FB did to the former CFO as shown in the movie "The Social Network". People keep talking about working for soulless companies when deciding to work for startups, but I can't think of a more soulless way to screw over your employees.
- mateo411 5y ago
  It's true that the company might dilute your shares, but that also dilutes everybody else's shares too. The greatest risk is the company won't be successful and your shares will be worthless.
  - bb88 5y ago
    I think you missed the point about issuing new shares. Everyone doesn't end up diluted in that case.
  - s1artibartfast 5y ago
    It happens. I've herd it referred to as a cram down +pull through. There are lots of ways to top people up after dilution. Example: Cap table: Founder 10%, ex-employees 10%, VC 80% Step 1) Company takes a down round, VC put some small money in, dilutes everyone 10:1. Step 2) New stock plan with 10% for founder Cap table: Founder 11%, ex-employees 1%, VC 88% Step 3) Founder and VC high-five
    - HWR_14 5y ago
      Isn't that something the exemployee would be able to sue over? Like, it's clearly fraudulently done to steal their equity.
      - bb88 5y ago
        Yes, but you have to sue over it. For most people, it's probably not worth it. Besides, since it's a private company, equity is what the board/executives say it is.
        HWR_14 5y ago
        > Besides, since it's a private company, equity is what the board/executives say it is. Can you clarify that?
        s1artibartfast 5y ago
        Maybe they meant valuation is what the board say it is
      - s1artibartfast 5y ago
        Dilution is extremely common and a lot of this funding stuff comes down to businesses strategy. My example was extreme, but there is tons of gray area for this kinda thing

wikibob 5y ago

No DMs on HN. Add your email address to the About Me section if you want to be reachable.