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by kasey_junk
3812 days ago
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This is one of the things I find so pernicious about startup options. One of the literal, best outcomes for all parties in that case (which I agree with you is surprisingly common) is for that young early career person to happily make room for the new regime, often by leaving to work at another startup or something new. But the way options work they are incentivized to stick around when it doesn't make sense and penalized if they do want to move on. That same early person probably does not have the capital to exercise their options when they leave. |
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Seed round: "Marketing Bob, you'll be employee #2. 1% -- 4 year vesting, 1 year cliff. You'll do everything from writing blog posts to attending conferences to talking to every single customer."
B round (2.5 years later): "Marketing Bob! Great news: we're now worth a billion dollars! That owes an incredible amount to your heroic efforts! You have excellent ability to become a co-founder at your next gig! Which starts whenever you want it to! We strongly recommend you start planning for it right now, and we'll even clear your calendar for the next two weeks to allow you to devote all of your efforts to planning! We hope you are socially aware enough to understand what we are saying here!"
Marketing Bob may well be CEO Bob at his next gig, but he'll be entering it being a) fired and b) having had ~$3.75 million stolen from him. (One would hope that the co-founders would go to the mattress with their VCs when the VCs say "Come on, vesting, we all know how it works. Of course the employee stock pool gets the 37.5 basis points back. That's like twenty engineers -- we need every point now!")