WTF, Nextdoor?
A friend got an offer from Nextdoor several weeks ago and was scheduled to start their job in less than 2 weeks. A few days back Nextdoor announced their imminent IPO happening in Q4. Suddenly, my friend’s offer (which they had accepted, signed and were ready to start a job off of soon), was updated from stock options to RSUs, which significantly reduced the value of the package (my friend had factored in the potential gains to be had if an IPO was to happen in the next 1-2 years, which was necessary to convince them to accept because it meant them moving from a nice FAANG job with a lot of appreciation gains to a pre-IPO startup without a widely known go-to-market plan). Now my friends doesn’t know what to do because they announced their departure from their old job but the offer they were given is no longer worth the jump. WTF, Nextdoor? I understand going forward post announcement to offer RSUs but that was an offer already made, signed and coming up. Edit: Many of you made comments about this being a post about myself, my girlfriend and all other sorts of assumptions. Sorry to disappoint but it is, in fact, a post about a friend and no, she is not my romantic girlfriend but she is my girl friend nonetheless :)).
Go back to old job? Would you mind sharing offer change? And did they just tell him with no negotiation? I'm wondering if it's malicious intent or just a shity transition to rsu due to upcoming ipo with bad execution
I don’t know the exact exact details but they told me it was in the multiple hundreds of K difference (my guess is 300-400K difference at least knowing how much they made before). Going back to the old job may be what happens but imagine the embarrassment and just overall situation. They’d never have a chance for a promo there now that their manager knows the intent. And no, zero further negotiations, just informed it’s happening. My friend is attempting to renegotiate now but it seems Nextdoor are resistant.
That doesn't sound right at all. That would mean they gave like 300k vs 700k offer? It sounds like what happened was they gave you a similar offer with current 409a valuation, but because ISOs are leveraged over RSUs (more stocks per $ because option instead stock) then your friend's projected IPO valuation (which isn't guaranteed by the way) would cause the ISOs to be worth more than the RSUs. Example: you are promised 100k in equity. This is given to you as ISOs permitting you to buy 200k stock for 100k cash. Because you projected 3x the valuation for IPO, you expect to gain 600k stock for 100k cash, hence 500k payout. Now, it is just 100k RSUs. Instead, on IPO, you project 300k payout. It does suck, since ISOs give you leverage and are nice. But I doubt your friend literally just got less money. If that were the case, it might be grounds for a lawsuit.