Stock options from a start-up's potential IPO or RSUs from publicly traded company. Which do you prefer?
New
dood1
Nov 2, 2020
13 Comments
When looking for a new job which one has more potential financially? Startups can IPO and early employees can be awarded a lot of stock options or it may fail to go to an IPO for many reasons. Publicly traded company almost always give RSUs at joining but theres a cliff.
comments
Net value of all my stock was a $500 long term capital loss, since all equity was worth $0. For the startup where I was a VP, I did get a $350k cash payout from our main investor, and package from the acquiring company that gave me a 2.5x bump in TC, so it wasn't all bad. Of course, if I'd spent 10 of those years at FAANG, I would have been much, much better off. That said, what I learned at startups is probably what let me have a shot at FAANG to begin with.
In any case, young me would probably still go the startup route for the experience, despite low probability of payout. Older me, with kid and a mortgage, is more about stability and (semi) predicability, so public company RSUs >> private RSU/options.
Isn't it fair to say that the last decade has been really good for FAANG and in hindsight, working at FAANG would have been a great move? We don't know how the stock market will behave the next decade and we may not see the kind of stock appreciation we've seen to make FAANG an obvious choice in the future.
To actually answer your question, I'm an M1 at FB who joined because I liked the tech and Director assured me there was a great growth path, which swayed me away for other M2+ offers I had. I agree that optimizing for FAANG right away probably would have netted me more money, but what learned in startup land put me in a place where I can walk into an interview for pretty much any role and come up with a real life experience where I had to deal with situation parallel to whatever an interviewers can come up with. Hell, even in terms of stupid LC questions, I'm old enough to have had to actually implement tree searches, sorts, etc. manually.