Stock options horror stories
What are the juiciest stories about options, vesting, negotiations, getting screwed, or doing the screwing.
Had to fucking pay 60k very recently in AMT tax to leave a fucking startup where I gave my blood for 5 years. And I was never offered early exercise. VCs should go to jail. On the flip side, I know I'll never do a startup anymore in my life
True and more common than not, unfortunately. VCs and experienced startup execs know this. Employees are locked in...many people at Uber with 7, 8-digit equity value they can't realize...can't exercise, can't sell, and can't leave...triple screwed. Some places have <90 day windows after termination. Bad. But I think that's an IRS reg as the ISOs will turn to NSOs after that point, which is why most places stick with 90 days to stay in that window, or else the company would have to pay payroll taxes on the gain from the options you exercised and the company doesn't want to do that.
I joined Cisco in December 2001, about nine months after the dot-com crash. The stock had fallen from $70+ to $38 by the time I joined. I was given options at that price (not a huge amount, but it seemed like a lot for me then, since it was my first large tech job). Everybody was telling me how lucky I was, that I got in at the bottom. The stock never recovered, and eventually went as low as $11 I think. When I left the company five years later, my options all expired underwater. :)
It's pretty much impossible to "do the screwing" yourself.
Compare "doing the screwing" to "getting screwed"
On a separate note, dot com bubble is gone, won't happen again in the foreseeable future IMO.
Main horror story: management promised my best teammate (ran the entire production of 100k daily users with only one other coworker) stock for a year. He never got it. The rest of us eventually did. 😢 Stock is useless anyway. We have no plans to raise funding or IPO. Stock cannot be sold and will be bought back for the same price as you paid when you leave the company.
Worked at adobe from 2005 until 2010. My options were priced at 32.50. The price rose to 44. I didn’t cash out thinking I was going to make more. The company started to miss numbers, Then the financial crisis started. They never went above water before I quit. I regret not selling when the CEO made a huge sale. Lesson learned - when a CEO sells a stake, GTFO
How can you not pay the tax man? If you make a profit, use 25% to pay the tax
I made the topic more simple to avoid these kind of comments. In short, if you're in a private company, you may exercise, purchase the stock for a gain, and have no way to liquidate the stock to generate cash. Complexities emerge for various reasons...security type and timing to name a few (NSOs, ISOs, RSUs, warrants, etc).
Can you give a specific example of this problem.