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Is it that bad? I'm on a relatively reduced salary due to ISOs in a company that wants to exit in the next couple of years, and a stock valuation that keeps go

Is it that bad? I'm on a relatively reduced salary due to ISOs in a company that wants to exit in the next couple of years, and a stock valuation that keeps going up (per audits) in the last years. It's also still expanding quickly. The company even did a raise and let some of us sell a percentage of our shares to the private buyer. This is not Silicon Valley, but a fintech. Given I have not only my time but 10s of k of my money tied up in options due to strike price going up with each grant, in what way am I risking getting screwed? In the comments here, it seems like I have a 60+ percentage chance of getting screwed through a dilution or other. However it doesn't feel that way. What should I be on the lookout for? The Paperwork is dozens of pages long and I'm not an attorney.

fragmede 3y ago
I'm not an attorney either. The best way to answer the question is to find one that specializes in this arena, and ask them, rather than believe anything you read on the Internet, or from an LLM. Still, the whole thing could just go to zero. The finteching doesn't work out and the company and thus your options become worth zero. I hope that doesn't happen for you, but before dilution, you have up look at that as a very real possibility. Something could pivot out from under you and it could just stop working and being worth anything. Once you've stared that beast in the face, yeah, dilution is a thing that could happen, but it's not in anyone's interest to screw you over. If you get screwed over by your board, people are going to know, and not want to work with those people ever again. So dilution absolutely happens, but you just have you hope you're not gonna get screwed over. There's no legal guarantee that you won't though, so that's why the common advice is that that options are worth $0, until they aren't. So you have to look at options as a lottery ticket and ask how much you like the work and how much you like your coworkers, how much you like what the company does, and can you live off the pay you do get.
pyrophane 3y ago
Well, for the most part you agreed to your employer's stock plan when you were granted options, and so you are subject to whatever is in there but there isn't a lot you can do about that since you would have already signed it a while back. I would just refer to an attorney regarding anything would modify your shares or the agreement you already signed, because those things can't be arbitrarily modified without your consent. Also, the most common way employees get "screwed" is when the company underperforms and has to raise money on bad terms, but there isn't much you can do about that.

fragmede 3y ago

I'm not an attorney either. The best way to answer the question is to find one that specializes in this arena, and ask them, rather than believe anything you read on the Internet, or from an LLM. Still, the whole thing could just go to zero. The finteching doesn't work out and the company and thus your options become worth zero. I hope that doesn't happen for you, but before dilution, you have up look at that as a very real possibility. Something could pivot out from under you and it could just stop working and being worth anything. Once you've stared that beast in the face, yeah, dilution is a thing that could happen, but it's not in anyone's interest to screw you over. If you get screwed over by your board, people are going to know, and not want to work with those people ever again. So dilution absolutely happens, but you just have you hope you're not gonna get screwed over. There's no legal guarantee that you won't though, so that's why the common advice is that that options are worth $0, until they aren't. So you have to look at options as a lottery ticket and ask how much you like the work and how much you like your coworkers, how much you like what the company does, and can you live off the pay you do get.

pyrophane 3y ago

Well, for the most part you agreed to your employer's stock plan when you were granted options, and so you are subject to whatever is in there but there isn't a lot you can do about that since you would have already signed it a while back. I would just refer to an attorney regarding anything would modify your shares or the agreement you already signed, because those things can't be arbitrarily modified without your consent. Also, the most common way employees get "screwed" is when the company underperforms and has to raise money on bad terms, but there isn't much you can do about that.