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Employees want to balance options vs. salary vs. time. They need fixed numbers to calculate this. With your approach, they get penalized if your company takes too long to sell/go public. If I have a four year vesting schedule, I know that if I commit four years to your company, I'll be fully vested. But if I bust my ass for four years then it takes you another four to have some sort of liquidity event, your company has actually put less value on my initial four years (in fact, reduced it by 50%). That won't fly with most people. I think that's why fixed vesting schedules work best, and issuing new options to retain employees after they're fully vested makes the most sense.



With your approach, they get penalized if your company takes too long to sell/go public.

Sure, it aligns everyone's incentives with getting the company to an exit (not necessarily as quickly as possible, but if it's going to take a long time, everyone should have the incentive to make it a big exit). Is that a bad thing?


Put a value on the options, then ask yourself the same question: I'll give you $200,000 to work for me for four years. But if we don't go public for eight years, I'll give you $200,000 to work for me for eight years. Doesn't make much sense to me.




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