4 ms·
For public companies, sure. But for a private company, where are the options are essentially a lottery ticket, I think a decent number of folks would choose re
by nfriedly 3y ago
For public companies, sure.
But for a private company, where are the options are essentially a lottery ticket, I think a decent number of folks would choose residuals.
- francoisdevlin 3y agoWhat makes you think the residuals would fare better than the options? The risk is about the same, yes?
- nfriedly 3y agoMy intuition is that residuals have a higher chance of a low payout, whereas options have a lower chance of being worth anything, but probably a higher value if they do pay off.
- lazide 3y agoResiduals for a company which is bankrupt would be zero - same as their stock price. Also, they could just rewrite the sections of code that are expensive and nuke their costs and your residuals at any point. Unlike a brand or whatever, it’s trivial to redo as it’s not user facing.
- deleted 3y ago[deleted]
- ganoushoreilly 3y agoI’d agree, especially if they’re relying on VC funding to power through growth.
- coffeemug 3y agoNo because with options you may have to wait for your liquidity event forever.
- lazide 3y agoIf you think any sane founder is going to pay out on ‘residuals’ of any significant amount without a similar liquidity event, I’ve got a bridge to sell you.
- mitthrowaway2 3y agoSome private companies pay dividends on their shares, so they have value to employees even if there is no market for them.
- nfriedly 3y agoYeah, that's a fair point. I've never had any of those shares, but I'm sure they exist. I'd probably take that over residuals.