4 ms·
Even if options vest, they could still be viewed as worthless. E.g., Pre-ipo company, 4 years pass, all your shares vest, however Company might tank in the next
by toephu2 11y ago
Even if options vest, they could still be viewed as worthless. E.g., Pre-ipo company, 4 years pass, all your shares vest, however Company might tank in the next 5 years, goes bankrupt, never gets bought out nor goes IPO, your vested shares are worthless.
- JoeAltmaier 11y agoOR even succeeds, get bought out for 40 million dollars, which all goes to pay investors' convertible debt. Net result: stock worthless.
- stephengillie 11y agoIt's like being paid in IOU: "1% of this lottery ticket's winnings". There's multiple layers of risk and trust, too many dependencies. The transaction is too complicated and takes too long to complete. So the probability for exceptions to occur is great, and handling for those exceptions will likely fail due to the complicated nature of the transaction.
- MCRed 11y ago%0.01 Because even if it's %1 at the time you join, by the time the lottery ticket can be cashed in it will be diluted, plus liquidations preferences, etc.
- serge2k 11y agoOr you take a discounted salary in exchange for stock, and after all is done you earn barely more than if you had just went somewhere else for full salary (if you are lucky you get that much).
- danielweber 11y agoOr you have a disagreement with your boss and leave, and while you are gone the company devalues the shares of everyone who left "because they aren't contributing any more."