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Brex has been around for a long time, so employees will have been issued stock options with vastly different exercise prices. Early employees' options will hav
by rahimnathwani 9mo ago
Brex has been around for a long time, so employees will have been issued stock options with vastly different exercise prices.
Early employees' options will have value, but more recent options are likely underwater.
- bpodgursky 9mo agoI strongly suspect they shifted to RSUs at those valuations.
- rahimnathwani 9mo agoIt seems unlikely that regular employees would be issued RSUs. Tax is due at vest, and you can't liquidate to fund the tax bill.
- glpgeFwac 9mo agoThe usual move here is "double trigger" RSUs that don't vest until a liquidity event, thus no taxes due until said liquidity event.
- rahimnathwani 9mo agoAre those common for regular employees?
- milkshakes 9mo agohighly common
- Romario77 9mo agoRight. Plus often the tax is paid out of RSUs given, you just get less in RSUs, some is subtracted to pay tax.
- haneefmubarak 9mo agoThere's double trigger RSUs and so on that allow you to have reasonable tax treatment, due to the theoretical threat of loss if liquidity isn't available. I worked at a company that had this at least while I was there.
- baumy 9mo agoI was a regular SDE at brex for a couple years and my various documents about comp say I have RSUs, and carta says so as well. I've never bothered to understand the details since none of the private companies I've worked for have had the non-cash portion of their comp be worth anything but $0 before.
- catlover76 9mo ago[dead]
- dalyons 9mo agoNope, you as a company owner are highly motivated to shift to RSUs once you hit a certain valuation and number of employees. Everyone does it.
- hrimfaxi 9mo agoCan you expand on why at a certain valuation and size you would shift?
- itake 9mo agooptions can only last 7 years, but brex was founded in 2017.
- SilverElfin 9mo agoWhen the options expire do they give new equivalent ones to the employees that hung on? Otherwise what’s the point?
- pastel8739 9mo agoYou can exercise the options before that time is up, paying the strike price to convert them to shares
- SilverElfin 9mo agoBut then you’re potentially stuck with worthless options you can never trade, right? Seems very unfriendly to employees
- seattle_spring 9mo ago> Seems very unfriendly to employees Ding ding ding ding ding! Most ICs figure this out sooner or later. Unfortunately many only discover it after being screwed hard financially.
- singron 9mo agoYou have to exercise the options or let them expire. You normally have 10 years not 7, but if a company comes up on 10 years after they issued their first options, they might try a tender offer to buy some employee shares. If your 10 year old "start up" shares can't be sold anywhere, then they probably aren't worth exercising. A company that can't provide liquidity to employees for 10 years will probably never do it.
- rahimnathwani 9mo agoWho says options can only last 7 years?