
The Good, The Bad, and The Ugly of Startup Options (2019) - luu
https://themargins.substack.com/p/the-good-the-bad-and-the-ugly-of
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supernova87a
I'm sorry to be negative, but reading that wall of generalized vague text lost
me 2 minutes of my life. Couldn't it have come with some hypothetical numbers
or scenario tables to contain even the least bit of useful information to take
away? It basically expanded the phrase "startups are risky payouts" into a
page of someone's blah mental theories.

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solidasparagus
> No firm will realistically show you their cap table, or tell you the number
> of outstanding shares

I don't think this is very true. I can't imagine getting an offer without
knowing the total number of shares.

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redis_mlc
It's usually true, companies won't make it easy.

Part of the reason is that the "cap table" is usually a mish-mash of
disorganized Excel spreadsheets after several rounds.

jwz had to battle Netscape HR to see those numbers.

But Delaware-registered companies must on request.

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solidasparagus
My comment wasn't quite clear enough I think. I don't think you will see a cap
table, but you should see total outstanding shares. And my comment was
probably more true for startups in the traditional sense and not the 10-year-
old, $10B 'startups' like Airbnb.

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subsubzero
Some things to watch out for:

#1 Be wary of late stage private companies offering large ISO grants, these
grants are absolutely worthless as long as the valuation does not exceed FMV
(fair market valuation) at time of grant.

#2 (ISOs) Start date FMV is not grant date FMV, I got burned by taking an
offer at a startup where the implied valuation of the ISO options shot up
dramatically after my start date, 400x by the time the board met and issued
options after my start date(the companies valuation only went down from this
peak).

#3 (ISOs) Make sure that the exercise window is a few years after you leave
the company, given alot of large unicorns take 7-10 years to go public you
don't want to get into a situation where you join a company, its valuation
shoots up, and are either let go or take another job and are forced to
exercise 100's of thousands of ISOs(in 30 to 90 days) leading to a mammoth tax
bill which gains may not be realized(think weWork and its dramatic collapse)
and you are still on the hook for this come tax time.

