What happens to your vested RSU after you leave a pre IPO? do you get to keep them when you leave? Do you have to pay taxes when you leave? There's a clause about the company has to IPO or be acquired within 7 years as a vesting condition, does that mean the worthless after 7 years?
Normally they will reissue new RSU with new expiration days. But technically they do not have to. Both companies will IPO within year years I think.
Couldn’t companies play a dirty move by waiting until the 7 year old rsus expire before going public, so that they can “take back” RSUs from employees? It’s a pretty immoral move, but what’s to stop companies from doing that?
...wanting to ever hire more technical talent again?
quite a few dirty tricks in the book for pre-IPO companies regarding options. Additional funding rounds devalue them massively, or they lay off a few months before annual vest date... I saw one where they laid off all of the sales channel and marketing people two months before an acquisition went through, so they missed out on a ton of their scheduled vests, and the remaining employees got a bigger part of the buyout.
You don't pay taxes until a liquidity event. Those RSUs are yours to keep if they are vested Now, if 7 years pass BEFORE a liquidity event happens then yes those RSUs disappear. But if these pre IPO companies don't hit a liquidity event by then, you have bigger problems
Having 7 years pass isn’t uncommon right? I’d imagine a lot of early employees at companies like Uber, Lyft, and Airbnb already saw their rsus expire after 7 years and couldn’t do anything about it.
Most such companies had options till recently. I know Pinterest only switched to RSUs in 2015. I assume other did so in a similar time frame.