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How can one protect himself from this scenario? Job offers will not even mention total number of shares outstanding.
by tintor 4y ago
How can one protect himself from this scenario?
Job offers will not even mention total number of shares outstanding.
- adam_arthur 4y agoBe important enough to get explicit protections against dilution in your job offer. Startups were barely worth it financially in the mid 2010's, anyone joining one the past few years has gotten majorly scammed. Still chuckle when I think about Postman reaching out for a job at a 5B valuation with something like 100 employees and less than 50m revenue. Good life lessons for many though
- deleted 4y ago[deleted]
- chii 4y ago> Be important enough if you do not contribute capital, i dont think you can realistically become _this_ "important".
- hobbyjogger 4y agoAgreed 100%. Essentially no employees (and nearly no founders outside of your unicorns) have anti-dilution protections against future investment.
- adam_arthur 4y agoThen don't join the startup
- KptMarchewa 4y agoLobby to delegalize stock classes.
- adam_arthur 4y agoAlso require companies issuing equity to employees to tell them the exact ownership percentage, as well as any dilution and dollar impact on you as a shareholder as dilution events happen.
- deleted 4y ago[deleted]
- karaterobot 4y ago> Job offers will not even mention total number of shares outstanding. Wait, mine told me. You may have to ask. I think it's okay to ask questions about it, if they're offering it as part of the pitch to get you to join.
- tintor 4y agoOk, recruiter tells you a total number. How do you confirm it?
- loeg 4y agoDon’t work for pre-public companies, or be the founder. Non-founder roles in private companies are not rewarded.
- chii 4y ago> or be the founder. or, ensure that there's SEC protection for pre-public companies' employees when/if they're issued stock. After all, issuance of stock is in lieu of compensation, so it is effectively an investment. Since these employees are not "sophisticated or accredited" investors, there needs to be enough disclosure, and protection for them. The best, and simplest, way to protect the employees is to grant stock with the same set of properties as founder's stocks. If there's dilution, the founders get diluted the same.
- loeg 4y agoI was discussing what you, individually, can do today, rather than wishful thinking about how things should be.
- georgeecollins 4y agoDon't accept a different class of stock than the founder, and no RSUs. That used to be standard and I would insist on it as an employee going forward.
- throwawaymaths 4y agoThe tax consequences suck though.
- pjc50 4y agoI'm not sure what the point of RSUs is, is it just the lockup?
- krallja 4y agoYou don’t pay taxes on them until and unless they turn into shares.
- tintor 4y agoCan you please explain why not RSUs?
- anm89 4y agoValue equity at zero. Work for cash. Note: this doesn't apply if you are a founder obviously