Ask HN: Stock options, Help
3 comments
Get some basic understand about how stock options work (grant, vesting, exercise) as well as how tax on options and shares works in your country. You could start here: http://blog.alexmaccaw.com/an-engineers-guide-to-stock-optio...
If you can estimate the value of the company today (e.g. if they had a recent round of fundraising, and you know the terms) then, providing you have access to the cap table (shares and options outstanding) and info on any different classes of shares, you can work out what the shares you would get are worth. Combined with the info on how the stock options work (strike price etc.) you can work out how much they are worth.
This isn't trivial, but it's just math. The first step is working out what you think the company is worth (given fundamental value, and when/how they might exit/IPO). If this yields a zero or low number, then you don't need to do any calculations.
If you can estimate the value of the company today (e.g. if they had a recent round of fundraising, and you know the terms) then, providing you have access to the cap table (shares and options outstanding) and info on any different classes of shares, you can work out what the shares you would get are worth. Combined with the info on how the stock options work (strike price etc.) you can work out how much they are worth.
This isn't trivial, but it's just math. The first step is working out what you think the company is worth (given fundamental value, and when/how they might exit/IPO). If this yields a zero or low number, then you don't need to do any calculations.
Awesome, thanks for the reply. I'll definitely check out this link as well :)
I think my plan will be to hold off on buying stock until I know I can continue my job remotely when I move. If I can hold my job for longer than 1 year, then it'll be likely I'll invest in the stock.
Thanks all!
I think my plan will be to hold off on buying stock until I know I can continue my job remotely when I move. If I can hold my job for longer than 1 year, then it'll be likely I'll invest in the stock.
Thanks all!
[IANAL]
Read the stockholder agreement, the articles of incorporation, and your employment contract. Consider consulting an attorney to review these documents.
Consider acting with inscrutable ethics.
Read the stockholder agreement, the articles of incorporation, and your employment contract. Consider consulting an attorney to review these documents.
Consider acting with inscrutable ethics.
I don't understand some details of the redaction. Are you going to pay money from your pocket to buy the options or you are going to have a discount of your salary in Exchange of the options?
I believe I'd pay out of pocket at a reduced rate, but I'm not 100% sure.
I think it's not standard that you have to pay (perhaps a symbolical $1 (one Washington) fee for legal details). I don't like it, but I hope that someone with more experience in this kind of arrangements can give a more authoritative answer.
Paying money to exercise vested options upon leaving a company is very standard.
> Paying money to exercise vested options upon leaving a company is very standard.
True; also very standard is cashless exercise, where you "pay" for your options using some of the optioned stock itself (really, taking fewer shares in a type of margin purchase). [1]
[1] See, e.g., http://www.investopedia.com/terms/c/cashlessexercise.asp
True; also very standard is cashless exercise, where you "pay" for your options using some of the optioned stock itself (really, taking fewer shares in a type of margin purchase). [1]
[1] See, e.g., http://www.investopedia.com/terms/c/cashlessexercise.asp
This is usually only available after an IPO or other "event". Not many brokers want to let margin plays happen with start-up options.
Perhaps I'm misunderstanding. I understand he has to pay now.
I've never seen an options agreement that didn't require a cash payout to exercise the option after leaving the company. The amount of time can vary but in the US it is very standard for that to be very soon after you leave the company.
Maybe you are thinking of a restricted stock grant?
Maybe you are thinking of a restricted stock grant?
I'm starting a new job and this new position has stock options. I've never had stock options before, so I'm looking for some quick advice.
The logistics of the stock options are fairly standard. 1 year vest @ 25% then ~2% each month after the first year.
Here's where it gets tricky. I'm planning to move away in 6 months - nothing I can control. However, I'm not 100% certain I can keep the job when I move, though I think it's not out of the question (as is why I took the position).
So, the question is... should I even consider stock? If I leave within the 1st year, I lose everything. But if I buy stock and then get to keep my job after moving, it'd probably be worth it. This company is also a private company with a possible IPO this year.
Thanks for any advice in advance!