Stripe RSU Policy on Quitting and Expiry

Amazon
2manicoiz

Go to company page Amazon

2manicoiz
Sep 23, 2021 29 Comments

Hi Folks,
1. I am new the pre-ipo space, I just learnt that some of pre-ipo double triggered VESTED RSUs "vanish" if employees quit before IPO or liquidity event. Is it true for Stripe too? It would be ridiculous
2. I also learnt that the vested RSUs at Stripe "expire" after 7 years if there is no IPO / liquidity event. How do you folks at Stripe deal with this usecase given that its been more than 7 years since company started?

Can anyone inside / outside stripe shed some light on these policies ?

Thank You!

#engineering #software #swe #stripe #pre-ipo #rsu

TC : 210k

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TOP 29 Comments
  • Facebook / Product
    ⛑‘s boss

    Go to company page Facebook Product

    ⛑‘s boss
    Ex-stripe here. For #1, this is not the case. Vested shares are yours and only IPO or acquisition can turn those from paper money to real money.
    Sep 23, 2021 9
    • Stripe
      fHna72

      Go to company page Stripe

      fHna72
      Can confirm no one outside C suite knows for sure about IPO date. I’m hoping for 2022 myself because I’m sitting on a lot of paper money, but it’s completely unsubstantiated.
      Sep 24, 2021
    • Amazon
      2manyQuest

      Go to company page Amazon

      2manyQuest
      @fHna72
      Yeah that’s what I’m thinking too,

      Heard from news that they’re starting to do the IPO
      I really hope it IPOs before grants expire otherwise it’s going to be crazy disaster!
      Sep 24, 2021
  • Chime
    hKwYe74

    Go to company page Chime

    hKwYe74
    #1 applies if the company also has a clawback clause. I don’t think Stripe has one, but Instacart is an example of a hot startup that does.

    #2 startups don’t switch from options to RSUs until they’re fairly large and their 409a (which would be the strike price if you’re given options) becomes too high. Stripe probably started giving out RSUs less than 2 years ago, so it doesn’t matter that they’re already 7 years old.

    Also, this is required to show “substantial risk of forfeiture” so you’re not taxed on these RSUs until the company goes public. In most cases when the shares approach expiration, they just issue new shares that vest quickly (like in a month) which resets the timer.
    Sep 23, 2021 10
    • Chime
      hKwYe74

      Go to company page Chime

      hKwYe74
      I still wouldn’t though. What’s the point of getting 1.5M worth of options with 750k strike price instead of a 750k RSU grant? Would you pay 750k to exercises those options after a few years when you want to leave the company? This especially doesn’t make sense since we’re talking about the scenario where the company still hasn’t gone public 7 years later.
      Sep 23, 2021
    • @chime you can sell in secondary market. 2x is not fair, 3x option is acceptable. Depends on your fanancial status, 750k is small portion of my assets, which I will probably invest in VC fund anyways.

      I don't like my investment relies on some one's morality with negative incentive system.

      As I said, 7 year RSU is probably fine, so far no bad thing happened in big preipo companies so far. But I will ask for more than public company.

      Tax is another issue. All your rsu will be taxed in the year if IPO, basically highest tax rate for your many years income.
      Sep 23, 2021
  • Stripe
    hjivthfx

    Go to company page Stripe

    hjivthfx
    The RSU’s expire within 7 years and there is no easy way for the company to compensate expired Rsu’s because the reason you are not taxed is an IRS rule to see a significant risk of forfeiture. The company can’t buy back RSU’s because these are not actual shares and if the company just re-issued RSU’s that would violate the IRS rule. So all in all solution is to IPO before the expiry else you should expect to lose them
    Sep 23, 2021 7