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

[Anonymous]

Anonymous wrote:

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.

It’s not a sure thing

[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.

Yeah hacker news goes on and on that basically unless you are the founder or Vc, most people don’t make much money from startups. For a new hire at a B round fundraising having options worth $4M, that is a astronomical valuation and I’m kinda wondering if they are blowing smoke.

Options should be considered lottery tickets; are the worth $600k or so less cash on hand? Because they aren’t going public anytime soon, and that’s at least how much you are forgoing.

[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.

Oh for the love of god, if you have no clue what you are talking about, don’t give advice.

Carta is nothing but a platform to store your shares and report your position. They manage things like option excercise. They don’t value your shares for you.

By law a company has to obtain a third party valuation of their stock every year or if there’s any material events.

This is done by accounting firms, typically specialized ones.

For a variety of reasons, usually, the firms will want to make this number lower not higher, because it sets the price of the options.

By default Carta uses this number, the actual value of the shares is usually higher. Sometimes much higher.

So OP has 4M of options. What they should do is find out what the strike price is and how long they have to excercise them if they leave. And it’s also unclear if it’s vested.

[Anonymous]

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

Is this OP?

You literally have a gazillion ways to make more money.

[Anonymous]

Anonymous wrote:

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.

Oh for the love of god, if you have no clue what you are talking about, don’t give advice.

Carta is nothing but a platform to store your shares and report your position. They manage things like option excercise. They don’t value your shares for you.

By law a company has to obtain a third party valuation of their stock every year or if there’s any material events.

This is done by accounting firms, typically specialized ones.

For a variety of reasons, usually, the firms will want to make this number lower not higher, because it sets the price of the options.

By default Carta uses this number, the actual value of the shares is usually higher. Sometimes much higher.

So OP has 4M of options. What they should do is find out what the strike price is and how long they have to excercise them if they leave. And it’s also unclear if it’s vested.

The strike price is a little over a dollar. Shares are over 550k. 90 days.
It’s single trigger vested if the company is acquired.

[Anonymous]

Anonymous wrote:

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

Is this OP?

You literally have a gazillion ways to make more money.

Not to make up the difference. I also don’t want to leave my job. We have 3 children.

[Anonymous]

Anonymous wrote:

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.

Yeah hacker news goes on and on that basically unless you are the founder or Vc, most people don’t make much money from startups. For a new hire at a B round fundraising having options worth $4M, that is a astronomical valuation and I’m kinda wondering if they are blowing smoke.

Options should be considered lottery tickets; are the worth $600k or so less cash on hand? Because they aren’t going public anytime soon, and that’s at least how much you are forgoing.

OP here. It depends. We went through an acquisition at DH’s precious company. He was there for 2 years and his equity percentile was about 6-7 percent of what he has now in terms of percentage of total
options. Both are under 1% total. He walked with several hundred thousand. So I see what you’re saying but his last company was definitely not a unicorn. In fact it sold for much less than was expected. He was not a senior level employee.

[Anonymous]

At the previous company he had about .15 percentile and now he has around 1 percentile of the total options pool.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

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.

Yeah hacker news goes on and on that basically unless you are the founder or Vc, most people don’t make much money from startups. For a new hire at a B round fundraising having options worth $4M, that is a astronomical valuation and I’m kinda wondering if they are blowing smoke.

Options should be considered lottery tickets; are the worth $600k or so less cash on hand? Because they aren’t going public anytime soon, and that’s at least how much you are forgoing.

OP here. It depends. We went through an acquisition at DH’s precious company. He was there for 2 years and his equity percentile was about 6-7 percent of what he has now in terms of percentage of total
options. Both are under 1% total. He walked with several hundred thousand. So I see what you’re saying but his last company was definitely not a unicorn. In fact it sold for much less than was expected. He was not a senior level employee.

Sorry 16-17 percent.. not sure of exact numbers but much less and strike price was significantly higher.

[Anonymous]

Anonymous wrote:At the previous company he had about .15 percentile and now he has around 1 percentile of the total options pool.

Well that is good, if he has 1% that’s a valuation of $400M which is not unreasonable.

That’s a huge amount of equity for a double digit employee hire, which is weird with lower salary — it would seem they really wanted him, did he they give him choice of equity or salary?

Are they profitable? With current downturn, funding will be drying up and acquisitions may hinge on more than revenue.

https://www.ft.com/content/7cbae3f3-8197-4816-aba8-860cac76cbb4

[Anonymous]

Anonymous wrote:

Anonymous wrote:At the previous company he had about .15 percentile and now he has around 1 percentile of the total options pool.

Well that is good, if he has 1% that’s a valuation of $400M which is not unreasonable.

That’s a huge amount of equity for a double digit employee hire, which is weird with lower salary — it would seem they really wanted him, did he they give him choice of equity or salary?

Are they profitable? With current downturn, funding will be drying up and acquisitions may hinge on more than revenue.

https://www.ft.com/content/7cbae3f3-8197-4816-aba8-860cac76cbb4

Yes it’s profitable. I don’t think so. The comp plan is just not as favorable as previous jobs, where he averaged $500+ several
years ago. It’s just a pretty big hit on our day for day spending. Any money we received from past jobs when into the market or savings.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:At the previous company he had about .15 percentile and now he has around 1 percentile of the total options pool.

Well that is good, if he has 1% that’s a valuation of $400M which is not unreasonable.

That’s a huge amount of equity for a double digit employee hire, which is weird with lower salary — it would seem they really wanted him, did he they give him choice of equity or salary?

Are they profitable? With current downturn, funding will be drying up and acquisitions may hinge on more than revenue.

https://www.ft.com/content/7cbae3f3-8197-4816-aba8-860cac76cbb4

Yes it’s profitable. I don’t think so. The comp plan is just not as favorable as previous jobs, where he averaged $500+ several
years ago. It’s just a pretty big hit on our day for day spending. Any money we received from past jobs when into the market or savings.

If it’s profitable really surprised they didn’t go public last year rather than fundraising.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:At the previous company he had about .15 percentile and now he has around 1 percentile of the total options pool.

Well that is good, if he has 1% that’s a valuation of $400M which is not unreasonable.

That’s a huge amount of equity for a double digit employee hire, which is weird with lower salary — it would seem they really wanted him, did he they give him choice of equity or salary?

Are they profitable? With current downturn, funding will be drying up and acquisitions may hinge on more than revenue.

https://www.ft.com/content/7cbae3f3-8197-4816-aba8-860cac76cbb4

Yes it’s profitable. I don’t think so. The comp plan is just not as favorable as previous jobs, where he averaged $500+ several
years ago. It’s just a pretty big hit on our day for day spending. Any money we received from past jobs when into the market or savings.

If it’s profitable really surprised they didn’t go public last year rather than fundraising.

Revenue producing? Maybe that’s different. The valuation is under $500m. It’s only a few years old. I don’t think there is any plan for it to IPO ever. It seems similar to his last company which was acquired. That’s what I know. From what I’ve heard they are doing well and having no issues fundraising. It’s just a big question mark when an exit especially since he can be making significantly more elsewhere. He doesn’t want to leave but he’s not the one that does our family’s finances and budgeting. We live in HCOL area and we got used to his previous pay so it requires some changes. I would hate for him to give up that income for a few years and the company for some reason doesn’t have an exit.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:At the previous company he had about .15 percentile and now he has around 1 percentile of the total options pool.

Well that is good, if he has 1% that’s a valuation of $400M which is not unreasonable.

That’s a huge amount of equity for a double digit employee hire, which is weird with lower salary — it would seem they really wanted him, did he they give him choice of equity or salary?

Are they profitable? With current downturn, funding will be drying up and acquisitions may hinge on more than revenue.

https://www.ft.com/content/7cbae3f3-8197-4816-aba8-860cac76cbb4

Yes it’s profitable. I don’t think so. The comp plan is just not as favorable as previous jobs, where he averaged $500+ several
years ago. It’s just a pretty big hit on our day for day spending. Any money we received from past jobs when into the market or savings.

If it’s profitable really surprised they didn’t go public last year rather than fundraising.

Revenue producing? Maybe that’s different. The valuation is under $500m. It’s only a few years old. I don’t think there is any plan for it to IPO ever. It seems similar to his last company which was acquired. That’s what I know. From what I’ve heard they are doing well and having no issues fundraising. It’s just a big question mark when an exit especially since he can be making significantly more elsewhere. He doesn’t want to leave but he’s not the one that does our family’s finances and budgeting. We live in HCOL area and we got used to his previous pay so it requires some changes. I would hate for him to give up that income for a few years and the company for some reason doesn’t have an exit.

Revenue is not profit, you can drive a lot of revenue by selling two dollars for a one dollar price, that’s a standard Internet me.

What do you mean they have no plans to IPO? What is their expected exit? Lots of companies, like large, take companies are laying off now, so I don’t think they would be looking to do an acquisition and take on more stuff with a unprofitable business?

I would really take a hard look at the long-term plan here, and try to see what the real valuation, it sounds like that’s just with their internal person to try and find a company.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:At the previous company he had about .15 percentile and now he has around 1 percentile of the total options pool.

Well that is good, if he has 1% that’s a valuation of $400M which is not unreasonable.

That’s a huge amount of equity for a double digit employee hire, which is weird with lower salary — it would seem they really wanted him, did he they give him choice of equity or salary?

Are they profitable? With current downturn, funding will be drying up and acquisitions may hinge on more than revenue.

https://www.ft.com/content/7cbae3f3-8197-4816-aba8-860cac76cbb4

Yes it’s profitable. I don’t think so. The comp plan is just not as favorable as previous jobs, where he averaged $500+ several
years ago. It’s just a pretty big hit on our day for day spending. Any money we received from past jobs when into the market or savings.

If it’s profitable really surprised they didn’t go public last year rather than fundraising.

Exactly - while I understand that this round of fundraising was really difficult with the economy, the good companies were able to pull through. I would question why they weren't able to get funding, what their runway is, how long before they start laying off, etc. If they didn't get funding, their runway starts to diminish. If they are going for funding, they can't stand on their own feet so there is a runway.
I know this because I am in the same situation.
Also - that seems like an awful lot of shares for someone that may be low senior level. How many shares are outstanding?
It is a crapshoot and I would be looking very hard at how secure my job if I am supporting my whole family before I look at winning the lottery with golden handcuffs.