The conversation around taxing RSUs and stock options has revealed something I'd always been curious about: Many people now believe equity positions in startups is a _bad_ thing
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I got a lot out of
@danluu ‘s detailed thoughts about this: https://danluu.com/startup-options/ …. You do have to ask yourself, if options are worth what the employer claims, why not sell them to investors and pay cash to employees. (There are some reasons why, but...) -
"What they're worth?" According to what, current valuation? Strike price?
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What value should be attributed to them when comparing to a public-company offer.
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Then it would almost definitely be zero every time
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I’m confused. Would you never consider a startup offer financially competitive with (say) a Google offer?
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Not if you're valuing it the same way a public company would. Options are forward-looking, so you're multiplying the eventual value of the options with the likelihood they'll get there.
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In other words, I wouldn't value them as a public company would.
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Of course, one might accept expected value is lower, but value the possible upside highly and prefer the startup offer.
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New conversation -
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What confuses the conversation is there are those startups that are using them because they're cheapskates. Usually companies that aren't competing with blue bloods for talent.
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And often they knowingly deceive employees into thinking the potential upside is much greater than likely possible by sweeping away important bits of info in evaluating their value
End of conversation
New conversation -
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not to mention the incentive of taking stake in the company
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