I get that stock options are risky, but people are so stressed out about that level of risk they don't believe in the fact that there's upside.
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Related: People think companies in Silicon Valley compensate with stock instead of cash because they're cheapskates, don't realize you absolutely have to if you want to compete with FB/Google
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Replying to @AustenAllred
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...)2 replies 0 retweets 0 likes -
"What they're worth?" According to what, current valuation? Strike price?
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Replying to @AustenAllred @danluu
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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Replying to @AustenAllred @danluu
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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Replying to @AustenAllred @danluu
Of course, one might accept expected value is lower, but value the possible upside highly and prefer the startup offer.
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Secondary shares are totally a thing, happens all the time
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