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The truth is that most companies in the unicorn zone will probably have some sort of stock sales plans set up that go through the company. It isn't black and w

by birken 11y ago

The truth is that most companies in the unicorn zone will probably have some sort of stock sales plans set up that go through the company. It isn't black and white between private/no liquidity and public/full liquidity. However, the private market liquidity is always controlled by the company, and that can create artificial boundaries on timing and volume, which can be trouble if an employee wants to leave on their own schedule.

mahyarm 11y ago
It's often only %10 of vested equity, once every one or 2 years. Also remember that if your $5mm company becomes a $1b unicorn after 4 years, and you got %0.5 at the start, then through dilution your %0.5 stake can become a %0.05 stake. Which means you get $500k / 4 years = $125k/yr in stock. But you cannot sell that stock, so it would of been better to go work at apple. It's very rare that a startup will pay better for an employee better than the big cos.
- birken 11y ago
  Your dilution math is pretty pessimistic. Even if you are diluted by 30% 5 times (which would be extremely uncommon for a company that grows so successfully), you'd go from 0.5% to 0.1% of the company in your example. More realistically, you'd probably expect to have around ~%0.15. So now you'd be looking at 1 or 1.5MM in a probably still-growing company, which compares much more favorably. Yes, as I noted above I do agree that volume constraints are an issue and are pretty annoying. Even in the examples where you get to hold options for 7 years, you wouldn't get the ability to sell at the "peak" (if you think there is one) unless the company was public. There are many things you have to take into account when valuing stock options, and from a purely compensation basis I agree that Apple/Google/Facebook are going to be tough to beat.
  - mahyarm 11y ago
    I was using dilution math from my personal experience.

by birken 11y ago

mahyarm 11y ago

It's often only %10 of vested equity, once every one or 2 years. Also remember that if your $5mm company becomes a $1b unicorn after 4 years, and you got %0.5 at the start, then through dilution your %0.5 stake can become a %0.05 stake. Which means you get $500k / 4 years = $125k/yr in stock. But you cannot sell that stock, so it would of been better to go work at apple. It's very rare that a startup will pay better for an employee better than the big cos.

birken 11y ago
Your dilution math is pretty pessimistic. Even if you are diluted by 30% 5 times (which would be extremely uncommon for a company that grows so successfully), you'd go from 0.5% to 0.1% of the company in your example. More realistically, you'd probably expect to have around ~%0.15. So now you'd be looking at 1 or 1.5MM in a probably still-growing company, which compares much more favorably. Yes, as I noted above I do agree that volume constraints are an issue and are pretty annoying. Even in the examples where you get to hold options for 7 years, you wouldn't get the ability to sell at the "peak" (if you think there is one) unless the company was public. There are many things you have to take into account when valuing stock options, and from a purely compensation basis I agree that Apple/Google/Facebook are going to be tough to beat.
- mahyarm 11y ago
  I was using dilution math from my personal experience.