5 ms·

> You've got some decent stock, say, like, 200,000 options. You vest over four years and your strike is $1/share (which is WAY too high for an early employee, b

> You've got some decent stock, say, like, 200,000 options. You vest over four years and your strike is $1/share (which is WAY too high for an early employee, but you feel "good" about this one.) You're making 50k under market value. >That means in four years, your stock is going to have to NET (taxes are a healthy 20%, plus you've got fees, so it's gotta be pretty high...) you a $1 a share in order to be worth it, assuming you never recieve a raise or a bonus at your new job, and you don't count your 401(k) match, health benefits, less-stressful working conditions and shorter hours. Pretty horrid that the post makes judgements ("decent stock", "WAY too high"), about options based on the quantity and price per share without considering what portion of the company the shares represent (and the initial valuation of the company.)

eropple 14y ago
Percentage doesn't matter to this calculation, though. You'll factor it into your estimation of whether it can net you $1/share, but he obviously can't.
- jaredsohn 14y ago
  >but he obviously can't. This is his hypothetical example; he obviously can. (i.e. he can say that the company is worth $1 million now so it needs to be worth $x million to make up for the lost pay.) Doing so would do a better job of communicating his message to the reader.
  - tkone 14y ago
    and would also be against my confidentiality agreement. These are hypothetical numbers. Lets say it's .5% at $0.30 -- the numbers are variables, doesn't change what the outcome is.
    - jaredsohn 14y ago
      >and would also be against my confidentiality agreement. This whole thing isn't that important but why would it be against your confidentiality agreement to write a hypothetical example in one way versus another? I am assuming all of the numbers are fake in the first place. My original point (again, not very important) is that I think it is more effective communication to say that a company is worth $1 million now and needs to grow to be $10 million for you to make back your lost salary via stocks, rather than talking about number of shares and strike prices (which you can't easily compare against other companies), since those values can easily be manipulated.

eropple 14y ago

Percentage doesn't matter to this calculation, though. You'll factor it into your estimation of whether it can net you $1/share, but he obviously can't.

jaredsohn 14y ago
>but he obviously can't. This is his hypothetical example; he obviously can. (i.e. he can say that the company is worth $1 million now so it needs to be worth $x million to make up for the lost pay.) Doing so would do a better job of communicating his message to the reader.
- tkone 14y ago
  and would also be against my confidentiality agreement. These are hypothetical numbers. Lets say it's .5% at $0.30 -- the numbers are variables, doesn't change what the outcome is.
  - jaredsohn 14y ago
    >and would also be against my confidentiality agreement. This whole thing isn't that important but why would it be against your confidentiality agreement to write a hypothetical example in one way versus another? I am assuming all of the numbers are fake in the first place. My original point (again, not very important) is that I think it is more effective communication to say that a company is worth $1 million now and needs to grow to be $10 million for you to make back your lost salary via stocks, rather than talking about number of shares and strike prices (which you can't easily compare against other companies), since those values can easily be manipulated.