[acslater00]

This is an absolutely embarrassing argument on the part of A16Z and it should be taken down.

Options have present value prior to exercise. You can compute that value using common financial models. Renouncing vested options by not exercising within a 90-day window is akin to taking that value and donating back to the existing shareholders of your firm, including current and future employees. So yes, it is true that not making a gift to all those people is worse for them, but what in God's name would lead a person to believe that this is the way it should be?

I'm not even going to get into the myriad ways in which founders and investors can conspire to create personal liquidity in a way that dilutes and actively harms the financial prospects of option-holders. But the fact that even the bare-minimum action of asserting a right to keep VESTED option value is being characterized as "additional dilution" and "maybe bad" is completely absurd.

I'm not prone to outrage, but this author, as well as Ben Horowitz, should apologize and retract this. https://twitter.com/bhorowitz/status/746050999341584384

[wp1]

A reasonable argument for a 90-day exercise window could have been: employees are told upfront that they need to remain with the company through a liquidity event for their options to be worth anything. The incentive to stay is both transparent and explicit. And aligns everyone's incentives, e.g. long-tenured employees perform better, making the startup's equity worth more, enriching the employee who stayed through the IPO.

The arguments in this article however were wholly incoherent.