Job isn’t as lucrative as other jobs, golden handcuffs.

[Anonymous]

Dh’s current job is not quite as lucrative as more stable jobs he has. Base is $230k. The rest is commission and he’s making about $300 total. Precious jobs paid him around $500k. We are evaluating if he should leave. The big what if is he has an options grant that is currently valued at 4million now fmv. This calculation is through the carta app and if it happened would be the next few years.
WWYD?

[Anonymous]

Uh, stick around to take advantage of my options? Even if he loses 50% of value, that's still $2m and $300K/year is nothing to sneeze at especially if its a super stable job.

If he exits at the full $4m he can consider retiring soon .

[Anonymous]

I love how you think that an app with a pretentious name can value your private company options/equity. It’s just a nice way to present the investors internal valuation, it doesn’t represent a real market price nor the reality of when they will have liquidation event.

If he could make $200k more for same effort, I would go with bird on the hand.

[Anonymous]

Anonymous wrote:I love how you think that an app with a pretentious name can value your private company options/equity. It’s just a nice way to present the investors internal valuation, it doesn’t represent a real market price nor the reality of when they will have liquidation event.

If he could make $200k more for same effort, I would go with bird on the hand.

Good grief, GTFOY. The reason I’m asking is because it is unknown. It’s the only way to provide a valuation instead of guessing out of thin air.

[Anonymous]

My DH has options grant valued at 7M and he’s doing anything and everything to hang on since is this pans out this is his last rodeo.

[Anonymous]

I would stick with the options unless the job really isn't stable and you have concerns with changing economy that he wouldn't be able to go back to more lucrative and stable job if the economy tanks. If he's likely to be in strong demand in any likely economy, and he likes the job, I vote for riding it out for the options.

[Anonymous]

What is the vesting schedule for the options and what would be the cost to exercise them?

What is the likelihood that there will be a liquidity event (sale of company or IPO) in the next couple years?

Given what has happened in the markets over the past 4-6 months, what is the likelihood that the value of the options has gone down?

What would the difference be in terms of lifestyle/stability to your family if your day to day cash flow was based on a $500k salary vs. the current? Is less money now worth more to you than future upside?

You need to discuss all of these questions and see if you and your spouse agree on the answers and on what that means in terms of staying/finding something different.

[Anonymous]

Anonymous wrote:What is the vesting schedule for the options and what would be the cost to exercise them?

What is the likelihood that there will be a liquidity event (sale of company or IPO) in the next couple years?

Given what has happened in the markets over the past 4-6 months, what is the likelihood that the value of the options has gone down?

What would the difference be in terms of lifestyle/stability to your family if your day to day cash flow was based on a $500k salary vs. the current? Is less money now worth more to you than future upside?

You need to discuss all of these questions and see if you and your spouse agree on the answers and on what that means in terms of staying/finding something different.

It’s 4 years but an automatic single trigger and will vest if it gets acquired. The cost of the options is around $800k. There is a good chance but of course there is no guarantee. They had several offers already. It’s the valuation as of this month, they are currently in a round of fundraising and it didn’t go down in the economy, the valuation went up because they have been revenue producing. The main issue is the lifestyle day to day. It’s a huge difference in our lifestyle especially with children in the picture. The difference in the salary difference is all the extras we would enjoy like travel, renovations, etc.

[Anonymous]

Anonymous wrote:My DH has options grant valued at 7M and he’s doing anything and everything to hang on since is this pans out this is his last rodeo.

That’s a good point. What round are they in now and how long does he expect to ride it out?

[Anonymous]

I wrote the laundry list of questions. Given your answers and the fact that the company is doing a fundraising round right now, they are probably not poised for sale in the next year. (Not necessarily, but it sounds like they had offers and decided to raise rather than sell the company.)

And the cost of the options (plus vesting schedule) is a non-trivial issue. Realistically, you will not be in a position to exercise them unless there is a liquidity event.

So I'd have some serious conversation around time frames and decision points. You'd have a lot more flexibility with a higher salary, but the upside sounds like it would be life-changing. The other thing I'd try to do is see if there is any room to increase salary in the current role.

[Anonymous]

Anonymous wrote:I wrote the laundry list of questions. Given your answers and the fact that the company is doing a fundraising round right now, they are probably not poised for sale in the next year. (Not necessarily, but it sounds like they had offers and decided to raise rather than sell the company.)

And the cost of the options (plus vesting schedule) is a non-trivial issue. Realistically, you will not be in a position to exercise them unless there is a liquidity event.

So I'd have some serious conversation around time frames and decision points. You'd have a lot more flexibility with a higher salary, but the upside sounds like it would be life-changing. The other thing I'd try to do is see if there is any room to increase salary in the current role.

That’s exactly right. It would be cost prohibitive to exercise them early and just too risky.
And that’s right as well, they are in round B of fundraising and have not discussed the exit much.

[Anonymous]

I’m a part time PS teacher so there’s not much flexibility with my own income or a chance to make more.

[Anonymous]

OP, with all due respect, you and your DH have no sight line into whether these options are going to be worth money or not.

What industry is he in?

You don't know if mgt is negotiating a down round (maybe unlikely but point is, you don't know), you don't know the dilution involved, you don't know how much the other offers were for, etc. There is a lot you just don't know.

That said, if your DH is in tech sales, and he's pretty confident of a positive liquidity event, you can always take a loan against his vested shares. He can also sell his vested shares in the secondary market.

If you tell me the name of the company, assuming it is tech, I can give you the inside baseball on what industry insiders are saying about the company. I've been in this industry for 20+ years and I've seen more people end up with "car money" than "2 comma" money. It really depends on your mgt team.

[Anonymous]

Anonymous wrote:OP, with all due respect, you and your DH have no sight line into whether these options are going to be worth money or not.

What industry is he in?

You don't know if mgt is negotiating a down round (maybe unlikely but point is, you don't know), you don't know the dilution involved, you don't know how much the other offers were for, etc. There is a lot you just don't know.

That said, if your DH is in tech sales, and he's pretty confident of a positive liquidity event, you can always take a loan against his vested shares. He can also sell his vested shares in the secondary market.

If you tell me the name of the company, assuming it is tech, I can give you the inside baseball on what industry insiders are saying about the company. I've been in this industry for 20+ years and I've seen more people end up with "car money" than "2 comma" money. It really depends on your mgt team.

ok, sure give me your email
address.

[Anonymous]

Anonymous wrote:

Anonymous wrote:What is the vesting schedule for the options and what would be the cost to exercise them?

What is the likelihood that there will be a liquidity event (sale of company or IPO) in the next couple years?

Given what has happened in the markets over the past 4-6 months, what is the likelihood that the value of the options has gone down?

What would the difference be in terms of lifestyle/stability to your family if your day to day cash flow was based on a $500k salary vs. the current? Is less money now worth more to you than future upside?

You need to discuss all of these questions and see if you and your spouse agree on the answers and on what that means in terms of staying/finding something different.

It’s 4 years but an automatic single trigger and will vest if it gets acquired. The cost of the options is around $800k. There is a good chance but of course there is no guarantee. They had several offers already. It’s the valuation as of this month, they are currently in a round of fundraising and it didn’t go down in the economy, the valuation went up because they have been revenue producing. The main issue is the lifestyle day to day. It’s a huge difference in our lifestyle especially with children in the picture. The difference in the salary difference is all the extras we would enjoy like travel, renovations, etc.

Holy 4M! I will take 2M, thank you.