4 ms·

The 185 day thing is fine. It's common. The company has likely made a legal commitment to not have any employees (past or present) sell for that time period. L

The 185 day thing is fine. It's common. The company has likely made a legal commitment to not have any employees (past or present) sell for that time period. Look in the company's s-1, it will be there.

JumpCrisscross 2y ago
> 185 day thing is fine. It's common This is the lock-up agreement. It’s negotiated between the company and its underwriters and is orthogonal to the RSUs.
- danielmarkbruce 2y ago
  It's not orthogonal. The agreement usually covers shares owned by employees and former employees.
  - JumpCrisscross 2y ago
    > It's not orthogonal. The agreement usually covers shares owned by employees and former employees It covers them as equity holders, or people with the right to equity. I’ve negotiated lock-up agreements. Nobody is thinking about RSU holders. Hence how OP winds up in this mess. OP’s problem stems from a draconian form of RSU. It doesn’t automatically vest on a liquidity event. It has the company collecting taxes. And it has a forfeiture clause.
    - danielmarkbruce 2y ago
      Yes, it covers them. Hence it's not orthogonal. The fact that there are two agreements doesn't make them orthogonal. Many situations are covered by more than one contract (or law or regulation).
      - JumpCrisscross 2y ago
        You’re being intentionally obtuse. The source of the problem isn’t the lock-up agreement, which was negotiated independently of the RSUs. And the lock-up agreement is easily (and commonly) circumvented—the problem is intractable because it’s unrelated to the lock-up. (And pedantically, a 185-day lock-up is not common.)
        fragmede 2y ago
        Ehhh 180 days is 6 months is fairly standard.
        JumpCrisscross 2y ago
        Which is why 185 isn’t. (Lock-ups have also gone into and out of vogue. And again, this is a problem with the company’s treatment of withholding. The lock-up agreement could go away and OP would retain their problem.)
        fragmede 2y ago
        The extra 2.7% isn't material to OP's problem. As you note, OP's real problem is the withholding.
        dalyons 2y ago
        Just curious, how is a lock-up commonly circumvented? Might be relevant information for me, I would appreciate any tips
greenspam 2y ago
I commented with a correction. March 15, 2025 is 140 days from the IPO day. This is before the lockup periods ends and they require us to estimate our tax, based on the fair market value of that date, with the following formula, and pay cash, otherwise the vested RSU will be canceled: Number of vested RSUs * the estimated fair market value of the stock at the settlement date * the appliable highest marginal federal, state, local income tax rate and employment tax rate. Even if no one pump up the stock price, the amount of cash needed in such a short notice, is unbearable, which will make most ex-employees to give up their shares.
- danielmarkbruce 2y ago
  They'll take your estimation ? Does it have to follow that formula?
  - greenspam 2y ago
    If on that day, the market price is higher than my estimation, they would inform me and give me 1 day time to pay the difference. If the market price is lower, then I'll have to go through the tax return process with IRS.
- JumpCrisscross 2y ago
  Borrow against the RSUs. If you have more than $500k, this should be trivial to privately arrange. (If less, idk. Also, not legal advice!)
  - danielmarkbruce 2y ago
    yeah i was going to suggest the same... there are companies that do this, and honestly anyone with a little cash will lend you the money assuming the stock isn't a totally ridiculous thing. How are the RSUs managed? Are they in a brokerage account? You may well be able to borrow from the broker.
    - breakds 2y ago

JumpCrisscross 2y ago

> 185 day thing is fine. It's common This is the lock-up agreement. It’s negotiated between the company and its underwriters and is orthogonal to the RSUs.

danielmarkbruce 2y ago
It's not orthogonal. The agreement usually covers shares owned by employees and former employees.
- JumpCrisscross 2y ago
  > It's not orthogonal. The agreement usually covers shares owned by employees and former employees It covers them as equity holders, or people with the right to equity. I’ve negotiated lock-up agreements. Nobody is thinking about RSU holders. Hence how OP winds up in this mess. OP’s problem stems from a draconian form of RSU. It doesn’t automatically vest on a liquidity event. It has the company collecting taxes. And it has a forfeiture clause.
  - danielmarkbruce 2y ago
    Yes, it covers them. Hence it's not orthogonal. The fact that there are two agreements doesn't make them orthogonal. Many situations are covered by more than one contract (or law or regulation).
    - JumpCrisscross 2y ago
      You’re being intentionally obtuse. The source of the problem isn’t the lock-up agreement, which was negotiated independently of the RSUs. And the lock-up agreement is easily (and commonly) circumvented—the problem is intractable because it’s unrelated to the lock-up. (And pedantically, a 185-day lock-up is not common.)
      - fragmede 2y ago
        Ehhh 180 days is 6 months is fairly standard.
        JumpCrisscross 2y ago
        Which is why 185 isn’t. (Lock-ups have also gone into and out of vogue. And again, this is a problem with the company’s treatment of withholding. The lock-up agreement could go away and OP would retain their problem.)
        fragmede 2y ago
        The extra 2.7% isn't material to OP's problem. As you note, OP's real problem is the withholding.
      - dalyons 2y ago
        Just curious, how is a lock-up commonly circumvented? Might be relevant information for me, I would appreciate any tips

greenspam 2y ago

I commented with a correction. March 15, 2025 is 140 days from the IPO day. This is before the lockup periods ends and they require us to estimate our tax, based on the fair market value of that date, with the following formula, and pay cash, otherwise the vested RSU will be canceled: Number of vested RSUs * the estimated fair market value of the stock at the settlement date * the appliable highest marginal federal, state, local income tax rate and employment tax rate. Even if no one pump up the stock price, the amount of cash needed in such a short notice, is unbearable, which will make most ex-employees to give up their shares.

danielmarkbruce 2y ago
They'll take your estimation ? Does it have to follow that formula?
- greenspam 2y ago
  If on that day, the market price is higher than my estimation, they would inform me and give me 1 day time to pay the difference. If the market price is lower, then I'll have to go through the tax return process with IRS.
JumpCrisscross 2y ago
Borrow against the RSUs. If you have more than $500k, this should be trivial to privately arrange. (If less, idk. Also, not legal advice!)
- danielmarkbruce 2y ago
  yeah i was going to suggest the same... there are companies that do this, and honestly anyone with a little cash will lend you the money assuming the stock isn't a totally ridiculous thing. How are the RSUs managed? Are they in a brokerage account? You may well be able to borrow from the broker.
  - breakds 2y ago