[american158931]

What's your opinion on how an employee should deal with a founder who clearly believes more in the A16Z stance on stock options more than the Adam's? Apart from obvious knee-jerk reactions like "stop working there."

Obviously it's in the founder's financial best interest (at least on the very surface level) for employees to not have the option to leave the company with shares at all. It is just lost money, from their perspective, and probably annoying to have an employee leave (creating a headache in your life) and take a bunch of equity with them. (And it severely limits an employees negotiating power over time, which can be of benefit to the founder...)

What are some strategies an employee can use to make the point that Adam's perspective is a much more employee-friendly one and, thus, better for the company?

Looking for some perspective.

[jerf]

"What's your opinion on how an employee should deal with a founder who clearly believes more in the A16Z stance on stock options more than the Adam's?"

Value the options at zero and take appropriate steps.

It may not be the statistical expected result, but it is the modal outcome anyhow.

"Appropriate steps" isn't just "quit". If you're happy with the cash salary than you don't have a problem, for instance, or the experience, or the lifestyle, or any of the other reasons you may be choosing to work at a startup.

"Obviously it's in the founder's financial best interest (at least on the very surface level) for employees to not have the option to leave the company with shares at all."

Well, yeah, but that's sort of vacuous; it's not in the employer's best interest for employees to be compensated at all. But that makes hiring pretty challenging.

"What are some strategies an employee can use to make the point that Adam's perspective is a much more employee-friendly one and, thus, better for the company?"

There isn't a general answer to that question, because it depends on your status in the company. In some places, even opening that conversation will put you halfway out the door. In others, they'll fall over themselves to fix the problem if you just mention it, because they'll not have heard of this before. You need to judge the situation you're in, and play out the possible scenarios before you step in to something like this. But I'd suggest you're going to need a very solid position to change something this fundamental about a company.

Generic advice: It's always easier to negotiate from a fallback position of strength; unless you're absolutely confident in your position, consider having a job in hand before starting this talk. (You don't have to tell your employers that you have an offer in hand.)

[zzleeper]

Yours is the most reasonable answer and I wish more engineers understood this. As long as there is a nontrivial fraction of engineers that don't, then startups can take advantage of these ridiculous vesting periods and terms.

[ScottBurson]

Let's put it this way. When considering a job offer from a startup, people say, you should value the options component of the offer at $0. Well, people say that, but I think everybody knows that someone who wants to work at a startup isn't really going to take that advice. They may try to factor it in by somewhat reducing the importance they give the options, but if they're accepting a below-market salary, as most startup employees do, they must be at least a little bit caught up in the hope of the options being worth something significant. I think even I, after years in the industry and several failed startups, could get caught up in that again, if wooed by the right startup.

On the other hand, if I were told that the options would be worthless if I left before a liquidity event, then I definitely would value them at exactly $0, and would therefore insist on a market-value salary, period.

If you've already joined such a startup, and taken a below-market salary, that's a different situation. I think the best advice I could give you -- unless you totally love working there -- would be to find another job.

[x0x0]

Or at least discover what you're giving up by getting an offer that either gives equity that is better than a pipe dream (viz an unethical founder could fire you 1 day before ipo and you'd get jack) or a good salary. Then negotiate with that in hand.

[robrenaud]

> Obviously it's in the founder's financial best interest (at least on the very surface level) for employees to not have the option to leave the company with shares at all.

On the that same surface level, it's also in the founder's financial best interest for employees to work for free.

Fundamentally companies offer better terms in compensation to attract better talent. I spent 11 years at Google. I was recently looking around for new places to work, the lack of liquidity even in the face of success was a big deterrent for me to work at any early stage startup.

[qq66]

I don't think anyone but a very early and very senior employee will be able to change a founder/company's perspective on this. The best attempt would be to walk away from the offer and explain explicitly why -- even if that doesn't work for the situation at hand, it will guide the market.

[jc4p]

I don't think you can do anything here once a culture's already been set. I also think that repeatedly pestering execs to ask about their efforts on this (as I've done at my current company every few weeks for the last 6 months) makes them think you're about to jump ship and want "free money", so watch out :)

[mahyarm]

Now? Go shop around ESO fund, snow ventures, standard VCs, angels, etc and ask them to make a deal to help buy out your stock. If they say no, maybe your company isn't doing as well as you think it is or your company is too small.

Usually these founders give you the standard 90 day agreement and are not Uber-level aggressive in trying to prevent these kinds of deals.

Later? Don't work for those companies or do the math. If you get RSUs then it's somewhat equivalent to getting those 10 year options anyway.

[dogecoinbase]

Encourage your qualified friends to apply for jobs at the company, get through to the offer stage, then decline the offer for that reason.

[danielweber]

During salary negotiations, say "tell me why I should think my options are safe against dilution."

[lukeschlather]

From my (somewhat limited, but concrete) experience, there is no way to get a satisfactory answer to this question. Just value the options at $0 and set your salary expectations accordingly.

[danielweber]

My answer was perhaps a little tongue-in-cheek, because I agree they won't. You'll hear things like "we want to encourage our employees to give it their all" and "we believe performers should be well-compensated," but those don't really answer the question.

You also might be told "you are in the same pot as the founders," which is technically true except that the founders can still be never-work-again-rich after a 90% dilution, and the founders will typically have a seat at the table when the question of "how do we re-up people who have been diluted so low but are still capable of spiking the deal if they don't like it?" comes up.