
Stock Plan Used by Hundreds of YC Companies - swampthing
https://www.clerky.com/yc-stock-plan-forms
======
xiaoma
This is an improvement in some areas. However it allows companies to terminate
employees for cause _and take back the shares they have already vested_.

In my opinion, if equity is presented as an important part of compensation, it
shouldn't be something that can be taken back any more easily than past salary
could be. Looking at what happened at Skype, Zynga and other companies is
enough that I would mostly discount any equity offered under such an
agreement.

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prdonahue
Don't have time to go through the docs just yet, but great to see mentions of
cashless exercise included. A more generous post-termination exercise window
would have been a nicer default, but I get that's still the norm in many YC
companies.

Over time I suspect that will change as more and more people learn the
questions they should ask when evaluating an offer, i.e., as they transition
from naive price takers to more sophisticated price setters. This link was
circulated on HN a few weeks(?) ago, but it's worth reposting:
[https://github.com/jlevy/og-equity-compensation](https://github.com/jlevy/og-
equity-compensation).

And here are some companies that offer >90 days:
[https://github.com/holman/extended-exercise-
windows](https://github.com/holman/extended-exercise-windows) (e.g., Coinbase
and Pinterest with 7 years, Quora and Asana with 10 years, etc.). Interesting
to see two companies in the list founded by early Facebook employees -- well,
cofounder and CTO -- do longer periods. Wonder if people got burned there by
the standard period?

~~~
brotherjerky
Cashless exercise is one of those things that costs the company very little,
but is incredibly advantageous for the employee.

However, companies don't always love it, because it removes a lot of the
"golden handcuffs" that serve as a shady way to retain employees as valuation
climbs.

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nostrademons
Curious if there's been any attention given to Progressive Equity, the stock
plan that Andrew Mason introduced for Detour almost a year ago:

[http://blog.detour.com/introducing-progressive-
equity/](http://blog.detour.com/introducing-progressive-equity/)

[https://news.ycombinator.com/item?id=9336392](https://news.ycombinator.com/item?id=9336392)

It seems like a good way to fix problems of early employees being under-
incentivized to take on startup-level risk, and to stay with the company once
later high-level employees have been hired above them. Have any YC companies
tried it out? Any plans to incorporate this into Clerky documents?

~~~
poof131
Seems like a solid plan to address issues with disparity in compensation /
upside between different tiers of employees. It spreads the reward but still
allows the founders to maintain larger ownership chunks, which is the
important part. Since equity is such a critical part of compensation [1], I’d
love to see this implemented more, but I have a feeling it will mostly get lip
service with people hiding behind “this is the standard.” Founders shouldn’t
accept the “it’s standard” argument from VCs when negotiating terms, and
employees shouldn’t accept the same argument from founders. You can’t have
your circular logic and eat it too. Standards change and just because
something is a standard doesn’t justify it’s existence. Slavery was pretty
standard for awhile and I’m glad we got rid of that one.

[1] [https://medium.com/the-wtf-economy/in-his-essay-on-income-
in...](https://medium.com/the-wtf-economy/in-his-essay-on-income-inequality-
paul-graham-credited-me-for-pre-publication-feedback-ff8a0b295a1b#.okgzweqp6)

~~~
kzhahou
How difficult would it be for a startup to create two stock classes, where one
has outsized voting rights? Then the monetary value could be spread more
evenly to non-founders (i.e., not a 50-to-1 ratio between founders and
employee #1), while the founder and investors maintain voting power.

~~~
poof131
I believe it’s very possible, just not standard. A number of companies have
adopted such measures to great effect for the founders to maintain power over
investors [1], but not many have used similar legal tools in reverse to help
spread the upside with earlier employees as suggested in the first comment.
Perhaps the standard should be for founders to get ‘super-voting’ shares and
use some of the power to distribute better upside distribution. Sell it in
both directions, longer term stability and more employee alignment.

[1] [http://www.businessinsider.com/googles-co-founders-are-
going...](http://www.businessinsider.com/googles-co-founders-are-going-to-
sell-44-billion-worth-of-shares-2015-2)

------
choppaface
I've reviewed the stock agreements of three YC companies (one fairly recent)
and they're close but not nearly identical to these documents. In particular,
none of the plans I reviewed had triggers (but perhaps those are saved for
C-levels).

The agreements don't leave room for non-uniform vesting (e.g. 10/20/30/40,
which takes many lines to write), which is nice. In my experience, the only
employees who appreciate those grants create as little value as the execs who
think it incentivizing to award them.

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goeric
This is great. I've added it to my startup onboarding guide blog post (which
already has Clerky as an immensely helpful service):
[https://goeric.quora.com/Startup-Onboarding-
Guide](https://goeric.quora.com/Startup-Onboarding-Guide)

~~~
vosper
Is Zenefits still a good recommendation, with all the fuss around their
(possibly illegal?) practices, and the negative comments from HN users that
seem to come up every time the company is mentioned?

~~~
goeric
Startups that scale that quickly are bound to make mistakes. Breaking the law
is not okay, and there was some bad judgement there. But you'll find a lot of
negative comments about the competition, too. Nobody is perfect. But Zenefits
is free.

I've had almost all positive experiences and they've saved me an immense
amount of headaches. Did I mention they're free?

~~~
HappyTypist
If you're not paying for it, you're not the customer. You're the product.

------
shostack
The big question with all of this is, what value does stock have if the odds
of seeing an exit seem to be shrinking substantially?

~~~
BinaryIdiot
Stock value is essentially worthless in a private company until they allow
selling of shares to investors or an exit occurs. Since such a small
percentage of companies actually do either of those things I think it's not
bad advice to treat them as worthless.

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m0rganic
Having the optional clauses laid out is really nice for founders... And I like
the table that spells out all of the parameters of the grants—very employee
friendly.

