Depends on the strike price / last valuation price ratio and if you think the company has peaked valuation. Many companies IPO very near the last funding round valuations and this is bad for ISO.
Rsu Options don't actually count as stock, just discounts on stock
Technically RSU isn't stock either, just a promise to give you stock in the future. Look up the difference between RSUs and RSAs if you care.
The relevant part is that an RSU has tangible value as long as a company is running. ISO can easily become worthless if the company is running but declines in valuation
Options are Magic Beans. There are so many factors involved that are outside your control that can make them less than worthless. RSUs still have value over the long run, and can be sold to diversify your holdings and spread your risk.
If the choice is X RSUs or 2X shares of options, then clearly RSUs (assuming option price is at current stock value). Stock has to double just to break even on the options... If the stock price more than doubles, you'll be happy enough with the RSUs anyway, and if the stock price stays the same, you'll be way happier with the RSUs instead of the options (which will be worthless). Even Tesla gives people 3X in options to substitute for X RSUs, 2X is an even worse deal.
This right here. 2X is below standard. Plus would you buy the stock right now at the current valuation? It’s pretty much the same to do so
Let's say you join a Series A company with a $20m valuation that has 20 million total shares. They give you options to buy 200,000 shares (1%) with a $1 strike price. It's counter-intuitive and people don't really believe me when I tell them this, but you should value each of those options at pretty close to $1, even though you are not getting a discount against the current market value. What? How could that be? It's because volatility is extremely high, and your two outcomes are essentially "1% of a huge number" or "$0". There are black scholes calculators online and you can confirm this for yourself - use an annualized volatility of 80-120% and see what happens. Adding to the benefit is the fact that you often get a discount to current true market value; in technical terms, a company's "409a" valuation is often much less than the value of its preferred stock in its last round. As a company matures, everything I just said becomes less and less true; Airbnb's volatility today is nowhere near as high as some series B SaaS derp, and they can't give you a huge discount to the true market price because it has revenue and normal accounting methods can value it pretty accurately. That is the main reason why companies switch from ISO to RSU at a certain point. The other reason is that the tax treatment of ISO is much more favorable than RSU when the strike price is low and much less favorable than RSU when the strike price is high. In answer to your question, assuming you are asking about illiquid RSU, 2x is a huge difference and you'd probably be better off with the ISOs, but it depends a lot on the stage of the company.
Rsu because options can expire worthless for meme companies. My old boss got burned by getting msft options and not shares. And that's msft
I got burned by getting Microsoft options too. Am I your old boss?
How so?