4 ms·

Double-check how soon your options will start vesting before you sign-on, so that you don't get screwed over by something like this. (Also, btw, it's "moot", n

by Smudge 14y ago

Double-check how soon your options will start vesting before you sign-on, so that you don't get screwed over by something like this. (Also, btw, it's "moot", not "mute")

famousactress 14y ago
How much difference does it really make? If all of OnLive's folks were vested, couldn't they still could have been fired and their shares diluted w/ another round or creepy acquisition terms?
- Smudge 14y ago
  Diluted, yes. Eliminated, no. See other comments in this thread about the "cliff" -- once you're past it, it's harder to get screwed over.
  - ojbyrne 14y ago
    There are an infinite number of ways that common stock (and the associated options) can be rendered worthless in acquisition or winding up a company. Simplest way is to sell the company for enough to pay off preferred shareholders, and use "personal service contracts" to compensate insiders. They get paid well, shareholders get zero. Most of them would not stand up to a lawsuit, but if you suddenly have no money coming in, are you going to be willing to pursue an expensive, years long legal process?
  - enjo 14y ago
    It's likely those investors have liquidity preferences anyways. In a fire-sale situation that equity is likely worthless.
  - famousactress 14y ago
    I don't find this distinction very useful, and I disagree that it's harder to get screwed over. It's in fact, just as easy.. we're only talking about degree. I think your argument is that instead of your shares being worth zero, they can only be diluted to any positive real number... which brings me little comfort.
    - btilly 14y ago
      There is a distinction. With dilution the founders, who are more likely than you to have a say in what happens, are also likely to suffer that dilution. However in the incident that happened the founder didn't lose a dime.
      - danielweber 14y ago
        Can't the founder be issued a bunch of new shares as part of the dilution? (I mean in theory, not in this specific case.)
        btilly 14y ago
        In theory, yes. However in practice you generally need signoff from other investors, who are unlikely to be supportive.
brk 14y ago
Good luck to any typical employee having any chance of getting an exception to a standard options agreement. Options have primarily been 1 year cliff/4 year vest since forever, and that is unlikely to change. This is all part of the "fun" of signing on to a startup, and a big part of the reason why you often hear advice advocating to not trade salary for options, or to not be swayed by the potential future value of options in considering your job offer. Unless you are a "name brand" in your industry and being heaving recruited, you should operate under the assumption your typical options grant will end up being worth between $0 and $5000 at best.

by Smudge 14y ago

Double-check how soon your options will start vesting before you sign-on, so that you don't get screwed over by something like this. (Also, btw, it's "moot", not "mute")

famousactress 14y ago

How much difference does it really make? If all of OnLive's folks were vested, couldn't they still could have been fired and their shares diluted w/ another round or creepy acquisition terms?

Smudge 14y ago
Diluted, yes. Eliminated, no. See other comments in this thread about the "cliff" -- once you're past it, it's harder to get screwed over.
- ojbyrne 14y ago
  There are an infinite number of ways that common stock (and the associated options) can be rendered worthless in acquisition or winding up a company. Simplest way is to sell the company for enough to pay off preferred shareholders, and use "personal service contracts" to compensate insiders. They get paid well, shareholders get zero. Most of them would not stand up to a lawsuit, but if you suddenly have no money coming in, are you going to be willing to pursue an expensive, years long legal process?
- enjo 14y ago
  It's likely those investors have liquidity preferences anyways. In a fire-sale situation that equity is likely worthless.
- famousactress 14y ago
  I don't find this distinction very useful, and I disagree that it's harder to get screwed over. It's in fact, just as easy.. we're only talking about degree. I think your argument is that instead of your shares being worth zero, they can only be diluted to any positive real number... which brings me little comfort.
  - btilly 14y ago
    There is a distinction. With dilution the founders, who are more likely than you to have a say in what happens, are also likely to suffer that dilution. However in the incident that happened the founder didn't lose a dime.
    - danielweber 14y ago
      Can't the founder be issued a bunch of new shares as part of the dilution? (I mean in theory, not in this specific case.)
      - btilly 14y ago
        In theory, yes. However in practice you generally need signoff from other investors, who are unlikely to be supportive.

brk 14y ago

Good luck to any typical employee having any chance of getting an exception to a standard options agreement. Options have primarily been 1 year cliff/4 year vest since forever, and that is unlikely to change. This is all part of the "fun" of signing on to a startup, and a big part of the reason why you often hear advice advocating to not trade salary for options, or to not be swayed by the potential future value of options in considering your job offer. Unless you are a "name brand" in your industry and being heaving recruited, you should operate under the assumption your typical options grant will end up being worth between $0 and $5000 at best.