4 ms·

> It puts an insane amount of risk on the employee The market is what dictates this. You don't have to take a startup job. Facebook, Google, etc. minted hundr

by mbesto 4y ago

> It puts an insane amount of risk on the employee The market is what dictates this. You don't have to take a startup job. Facebook, Google, etc. minted hundreds of millionaires when they IPO'd. It's hard for me to feel bad for people who take those risks. I'd argue a whole lot of engineers should be much more judicious about joining startups and ask for more options. If engineers knew how to calculate startup risks better they'd probably know there is too much equity is concentrated to too few individuals (mainly founders).

subsubzero 4y ago
you pick two out of thousands! Google IPO'd so long ago that the rules regarding ISOs were different back then, strike prices could be arbitrarily lowered to whatever value the company wanted, not the maximum valuation as required by law now. https://www.sec.gov/news/testimony/2006/ts090606cc.htm https://www.sec.gov/news/testimony/2006/ts090606cc.htm
- scarface74 4y ago
  And this “I’ll get rich!” statistical improbability is why thousand of employees are willing to work for less than their market value in exchange for Monopoly money. My former CTO who did have a lot to do with our former company having a 10x exit after I left (with very little equity that I didn’t exercise) tried to get me to work with him as a tech lead for what would have been a competitive local offer (mid 100s) - I work remotely - and “equity”. But couldn’t come near the base + RSUs at BigTech even with the recent 30% YTD drop. They also have absolutely no idea how VC funding and the public markets for IPOs work during a bear market. At least I can sell my RSUs for real money when they vest.
  - mbesto 4y ago
    > And this “I’ll get rich!” statistical improbability is why thousand of employees are willing to work for less than their market value in exchange for Monopoly money. And this is precisely my point. If less IC's believed this, it would put market pressure on startups to give them more options and better outcomes (including taxes).
    - scarface74 4y ago
      The only “better option” I would accept is more cash - not Monopoly money.
      - mbesto 4y ago
        Totally, but startups (literally?) do not have that option.
s1artibartfast 4y ago
The market has nothing at all to do with ISO tax policy. As OP said, it is taxing unrealized gains. It makes as much sense as making employees pre-pay 10 years of income tax when they start a job.

by mbesto 4y ago

subsubzero 4y ago

you pick two out of thousands! Google IPO'd so long ago that the rules regarding ISOs were different back then, strike prices could be arbitrarily lowered to whatever value the company wanted, not the maximum valuation as required by law now. https://www.sec.gov/news/testimony/2006/ts090606cc.htm https://www.sec.gov/news/testimony/2006/ts090606cc.htm

scarface74 4y ago
And this “I’ll get rich!” statistical improbability is why thousand of employees are willing to work for less than their market value in exchange for Monopoly money. My former CTO who did have a lot to do with our former company having a 10x exit after I left (with very little equity that I didn’t exercise) tried to get me to work with him as a tech lead for what would have been a competitive local offer (mid 100s) - I work remotely - and “equity”. But couldn’t come near the base + RSUs at BigTech even with the recent 30% YTD drop. They also have absolutely no idea how VC funding and the public markets for IPOs work during a bear market. At least I can sell my RSUs for real money when they vest.
- mbesto 4y ago
  > And this “I’ll get rich!” statistical improbability is why thousand of employees are willing to work for less than their market value in exchange for Monopoly money. And this is precisely my point. If less IC's believed this, it would put market pressure on startups to give them more options and better outcomes (including taxes).
  - scarface74 4y ago
    The only “better option” I would accept is more cash - not Monopoly money.
    - mbesto 4y ago
      Totally, but startups (literally?) do not have that option.

s1artibartfast 4y ago

The market has nothing at all to do with ISO tax policy. As OP said, it is taxing unrealized gains. It makes as much sense as making employees pre-pay 10 years of income tax when they start a job.