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There are a couple key omissions (though there are many -- this is not a particularly substantive article): - When you are joining a company, the first questio

by birken 13y ago

There are a couple key omissions (though there are many -- this is not a particularly substantive article): - When you are joining a company, the first question you should ask is "How many outstanding shares are there?" All you really care about is the % of the company you are potentially getting and the current value of the company. - The AMT is a big deal that can heavily impact your life when you exercise options. There is no point in getting to the details here, but if you happen to be lucky enough to be working for a company that has gone up significantly in value, the AMT can be an expense to consider when exercising options. It can also indirectly affect: a) Whether or not financially you can leave a company (because if you leave you are forced to exercise your options) or b) If you should exercise your options early for smart tax planning ----- Kudos to the author for trying to inform people, but if you work for a successful startup and have questions about stock options, do not listen to this article at all and talk to an accountant!

greghinch 13y ago
"All you really care about is the % of the company you are potentially getting and the current value of the company." Respectfully disagree: what you care about is strike price, share price, and quantity. Percentage can be a good indicator, but ultimately, those 3 figures are what will determine your payout. As a hypothetical, getting 10% of a company with a strike price just shy of the share price on exit is still pretty worthless.
- georgemcbay 13y ago
  The share price for the types of companies this article focuses on is generally unknown (as anything other than wild ass guesstimates) at the time this would be a concern for new employees. Percentage of ownership isn't unknown and thus may be more useful, but ultimately neither is a guarantee of anything since either way you can be virtually wiped out by future dilution if you're just a common share pleb, which is by far the norm for non-founder early employees.

by birken 13y ago

greghinch 13y ago

"All you really care about is the % of the company you are potentially getting and the current value of the company." Respectfully disagree: what you care about is strike price, share price, and quantity. Percentage can be a good indicator, but ultimately, those 3 figures are what will determine your payout. As a hypothetical, getting 10% of a company with a strike price just shy of the share price on exit is still pretty worthless.

georgemcbay 13y ago
The share price for the types of companies this article focuses on is generally unknown (as anything other than wild ass guesstimates) at the time this would be a concern for new employees. Percentage of ownership isn't unknown and thus may be more useful, but ultimately neither is a guarantee of anything since either way you can be virtually wiped out by future dilution if you're just a common share pleb, which is by far the norm for non-founder early employees.