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> Which is too far in the future to count on. Actually you should count on them always being worth $0. Not only for compensation purposes but for your personal

> Which is too far in the future to count on. Actually you should count on them always being worth $0. Not only for compensation purposes but for your personal psychology. It's better to tie yourself to reality.

bcheung 11y ago
Sun Tzu would agree with you. People need to see things as they most likely are (worthless) not as they like to see things (I'm going to be rich).
vacri 11y ago
There's been a couple of stories here in the past where employee stocks have literally been worth $0 when they vested, due to financial shennanigans pulled by the founders. options should be seen in the same vein as bonus money - they don't exist until the money is in your hands. Some people work at places where bonuses can be relied on like bedrock, but usually I see people struggle to get their promised bonuses.
- tptacek 11y ago
  It's very easy for shares in a liquid-seeming exit to be worth nothing, even with no shenanigans. For instance: raise a B round, and then sell for low 8 figures. Liquidation preferences will wipe out most of the outcome. People lose perspective about this, because they only see the final number (and the "employee shares worth 0"), but if you raise 20MM and then sell for 20MM, it's not hard to see why the shares aren't worth anything.
  - s73v3r 11y ago
    Actually, it is hard. Why are the employees the only ones that have to take it on the chin?
    - tptacek 11y ago
      The founders do too. The venture capitalists, on the other hand, are deploying money that isn't theirs. It feels like you can argue that to the extent they do anything to cushion the outcome for startup team members, they have to be doing it at the (ultimate) expense of pension fund stakeholders. I don't know how strictly true that is in most cases, but it's a factor worth considering.
vlasev 11y ago
Same with lending small things and small sums of money to friends/acquaintances. It's often healthier to assume that you are not getting them back.

bcheung 11y ago

Sun Tzu would agree with you. People need to see things as they most likely are (worthless) not as they like to see things (I'm going to be rich).

vacri 11y ago

There's been a couple of stories here in the past where employee stocks have literally been worth $0 when they vested, due to financial shennanigans pulled by the founders. options should be seen in the same vein as bonus money - they don't exist until the money is in your hands. Some people work at places where bonuses can be relied on like bedrock, but usually I see people struggle to get their promised bonuses.

tptacek 11y ago
It's very easy for shares in a liquid-seeming exit to be worth nothing, even with no shenanigans. For instance: raise a B round, and then sell for low 8 figures. Liquidation preferences will wipe out most of the outcome. People lose perspective about this, because they only see the final number (and the "employee shares worth 0"), but if you raise 20MM and then sell for 20MM, it's not hard to see why the shares aren't worth anything.
- s73v3r 11y ago
  Actually, it is hard. Why are the employees the only ones that have to take it on the chin?
  - tptacek 11y ago
    The founders do too. The venture capitalists, on the other hand, are deploying money that isn't theirs. It feels like you can argue that to the extent they do anything to cushion the outcome for startup team members, they have to be doing it at the (ultimate) expense of pension fund stakeholders. I don't know how strictly true that is in most cases, but it's a factor worth considering.

vlasev 11y ago

Same with lending small things and small sums of money to friends/acquaintances. It's often healthier to assume that you are not getting them back.