Pre IPO company RSU term limit

Juniper
yziY03

Go to company page Juniper

yziY03
Feb 2 9 Comments

I just got an offer for a pre IPO company. The offer letter cites that the RSUs (not stock options) have a term limit of 7yrs. I was told that if the company does not IPO or does not get acquired in this time, these RSUs will be lost.

1. Is this common for pre IPO companies to have a term limit?
2. Assuming 25% vesting each year for 4 years, does the term limit apply to 25% in 7 years from today, another 25% in 1+7=8 years from today and so on? Or is all entire 100% in 7 years.

Tc :300K

#ipo #software #tech #rsu

comments

Want to comment? LOG IN or SIGN UP
TOP 9 Comments
  • You probably has second trigger so it does not vest until ipo for tax reasons. 7 year from grant date. Yes it is required again for tax reasons
    Feb 2 1
    • Juniper
      yziY03

      Go to company page Juniper

      yziY03
      OP
      So if RSUs are all granted tomorrow, does that mean they can potentially expire in 2029 (7 years from 2022) or would the expiry date be calculated after each lot vests over the next 4 years?
      Feb 2
  • Micron
    f1fan

    Go to company page Micron

    f1fan
    Should be 7 years after you leave the employer?
    Feb 2 1
    • New
      •|

      New

      •|
      no. you’re thinking of options
      Feb 3
  • New
    •|

    New

    •|
    1. an expiration is required. usu see 10 years
    2. all 100%

    if they do expire before becoming liquid they will be reissued if you are currently employed. they don’t have to be, but i’ve never heard of that not happening. if you are not employed they will be lost
    Feb 3 0
  • Adobe / Eng
    HEON53

    Go to company page Adobe Eng

    HEON53
    You'll have to obtain the full grant agreement, it is usually uncommon to what you might have in MAANG and clarifies your situation. Most private companies do double-trigger vesting meaning you are not actually getting RSUs until post-IPO blackout period ends so you'll have to get used to live on base salary which is not that great I suppose. Besides the potential bankruptcy the company may be appraised much lower than you expected. Or just fail to IPO which leaves a lot of uncertainties. Or it may skyrocket and make you a millionaire one day.

    Here is a nice short read on how RSUs in private companies vest: https://flowfp.com/private-rsus/
    Feb 6 0
  • This comment was deleted by original commenter.

    • New
      •|

      New

      •|
      op doesn’t have options. he has RSU
      Feb 3