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 :)).
That’s insane. Did they provide justification?
Tbh I don’t know. But they did not negotiate, just informed.
He took the risk of jumping and didn’t succeed. The amount of entitlement of risk-free returns the new generation is demanding is mind-boggling
Take the job they signed. It’s probably just an uphill battle to change it. Definitely would ask to take the deal I signed, but I’m not going to complain about something I don’t have control over. Especially when it comes to valuations in x time, that’s just arbitrary and speculative.
Hi I work at nextdoor and it's a battle OP's friend cannot win and not worth fighting for
Thanks @nextdoor. Could more people from Nextdoor provide some insights? Maybe they don’t care because they all have options anyways.
If Nextdoor’s stock really flies after IPO, I don’t think that will matter much. Also, you friend can also ask for some make up in the next performance review after joining.
Companies usually give you more options than RSU’s, and it likely would have been worth more if their IPO does pop.
And options by definition have higher upside than RSUs. OP can still make a lot of the stock does well but they'll never do as well as if they had options
Lol sucks for them? What they gonna do sue? Welcome to corporate America and capitalism at it's finest, protect the bottom line for the investors. Employees eh, get new ones.
Jesus Christ do you even know what capitalism means. Stfu
Idiots blame the failings of government as "capitalism" and the solution as more government.
That’s slimy as hell. I’d reject it out of principle. Or take it then quit ASAP
Best way to get back at them is to take the job, do minimal.work and suck them for money while you find another job. Or do two jobs
Has anyone done this before seems like an interesting premis
That isn’t slimy. Just unfortunate timing for your friend. What should they do… hold off on IPO’ing until your friend joins? “Hi Wall Street, investors and the hundreds of employees who have gotten us to this point… jk on the IPO. We need to wait until mgmX32s friend joins”.
Some companies freeze hiring to deal with this issue. Maybe they can plan better?
The answer is to gross up the offer - give additional RSUs to make up for the difference in money from 409A to IPO range - or at least part of the way there. It’s not hard. If the employer met OPs friend in the middle, this would probably be a different conversation.
Did the actual dollar value of the overall package change? If so, that would be a shitty move. I'd expect a 1 to 1 conversion. It sort of sounds like your friend is upset that Nextdoor did not consider their preferences when planning for the IPO? In which case... tough? Planning for specific outcomes when joining a startup is just dumb, that rollercoaster doesn't give a crap about your plans to FIRE at age 25.
By several hundred thousand as of today’s projected value of the RSUs.
Can you give details? That is a massive hit, that's not just a minor inconvenience but literally gross. You are claiming they did not just remove your friend's leverage and upside, but actively stole 300k on today's valuation. I think we need to know the numbers to believe this, that's truly sounds horrendous
It is the cost of making business, sometimes you lose, sometimes you win 🤷♂️🤷♂️
It's super shitty on their part but unfortunately your friend doesn't have any option.
How is it shitty on their part?
Did you even read the post?
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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.