

Are you working for a startup and don’t know when to quit? - codemechanic
http://www.codelathe.com/blog/index.php/2009/02/27/are-you-working-for-a-startup-and-dont-know-when-to-quit/

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wheels
By this metric employee #1 at Facebook should have bailed by now. Seriously?

Ultimately this can be boiled down to, "If you don't think your company is
going anywhere, and you're not being compensated adequately, then it's
probably time to look elsewhere." Which is a step closer to reality, but
ignores things like the fact that you might simply like it where you work.

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bbuffone
If everything boiled down to money, then it would be simple as simple as the
author stated.

I would look at it a little differently; people join companies for many
reasons, if you are deciding to leave because of money. You probably already
made a few errors; choosing the company, in the hiring process by not getting
the salary you deserve and during your yearly review not fighting for more.

Once you joined the company though, you will most likely be working off your
balance of intrinsic desire to accomplish everything you can for the company.
If at any point your motivation turns to a purely extrinsic (i.e bonuses,
cashing out) it is time to leave.

It is a funny thing how different things seem when you are using intrinsic
motivation vs. extrinsic motivation. The best way I can explain it is simply:
You will walk through hell with seem like heaven when it you are motivated
internally vs. even the simplest of task will seem like hell if you are
staying to receive a bonus.

~~~
codemechanic
Optionality can assign monetary value to intangible benefits too - Like work
satisfaction, Happiness, Good Team and Social networks

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JeremyChase
This is far too simple. Essentially it is only weighing the financial
incentive to stay, and it insufficiently weighs the odds of the startup paying
out.

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swolchok
Well, I would phrase it differently -- the financial incentive to stay is
salary + EV[options], (where EV is expected value) which takes into account
the odds of the startup paying out.

~~~
mrtron
Correct, and the median EV[options] is 0.

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hedgehog
Negative if you factor in the cost to exercise them (typically you will have
to when you leave). The author does only recommend exercising the options if
the company is profitable, this is probably good advice. If the company is not
self-sufficient consider the potential impact of a future financing with the
present market. Here are two to factor in to your calculation:

\- Reallocation of ownership between share classes (substantially diluting the
existing common stock).

\- Creation of new shares with a high senior liquidation preference.

You might see the reallocation of the pre-money value happen on a "money-in"
basis. The valuation itself will obviously depend on how much the company
needs the money. When it's all done the existing common stock (founders and
employees) could well be worth less than 1% of the company. If you're still at
the company you'll probably get new options issued but if you've left you'll
just have the old ones worth approximately $0.00.

That said I would focus on whether you're having fun and doing/learning
something you think is worthwhile rather than on how much your options might
be worth.

