| "Rationally, the now-former employee will hold off until the end of the exercise expiration window before deciding whether to exercise at all." Classic example of good maths, bad thinking. This is nonsensical. For employees where these options represent 90% of their wealth, the benefit from marginal time value in these options is trivial when compared to getting liquidity and diversification. "The bottom line is that if companies are going to continue to stay private longer, we need to fundamentally re-think the stock option compensation model. We need better, careful, and more thoughtful solutions." Seems like the simplest solution is just for the investors to force the company to go public. Going public creates the liquidity that solves this problem. It might be at a lower sticker price, but at least employees can arrange financing to pay for excercize and tax needs. That and they might be able to actually diversify from a portfolio no self-respecting LP would tolerate. |