Golden Handcuffshttp://dlvr.it/R0JpXc
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Replying to @avc
It seems to be that the real problem is short exercise windows creating these false incentives. Why not just have long exercise windows by default
@fredwilson?1 reply 0 retweets 2 likes -
I don't think so. That has its own issues. It creates an overhang, for one But we have a few companies that do it. I'd rather see a financing mechanism emerge for exercise. It would be better for everyone.
4 replies 0 retweets 1 like -
Replying to @fredwilson @avc
A nice financing option won’t help startups that are still sub $500m in valuation. Also seems bad to wait for a solution to arise that’s perfect when a fairly ok solution already exists.
2 replies 0 retweets 2 likes -
I agree that for less valuable startups the financing option isn't viable. But if a company is gonna offer 10 year options they need to value them as such. A ten year option is with a LOT more than a four year option.
1 reply 0 retweets 1 like -
No USV portfolio companies that offer ten year extensions on departure value them correctly. I'm pushing on this issue. And potential hires don't value the ten year extension properly when comparing offers. So giving a ten year extension when others don't is costly in dilution
1 reply 0 retweets 2 likes -
Replying to @nabihaxzahra @fredwilson and
The core issue is many startup employees don't know there's an exercise window and it's not something you'd intuitively deduce from first principles. If doing the latter you'd more likely arrive at expecting a 10 year (i.e. lifetime of the option) window to be the default.
1 reply 0 retweets 1 like
Widely known exercise financing options are one solution. 10 year exercise windows another. More explicit education on options for new employees would be another but not much employer incentive to do that unless it becomes necessary to hire best talent, which is happening.
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