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by cglouch 3473 days ago
I understand the basics of actual stock options, but get confused by employee stock options. What would you say is the difference?
1 comments

You have 3 significant "problems" with employee stock options:

1) need to exercise them upon leaving: when you leave a company, a company might force you to exercise the stock option within 90 days of leaving (and this takes cold hard cash too!). This gives you stock in the company, BUT:

2) taxes: you have to pay taxes on "fair market value" of this income

3) illiquidity: you can't sell it (now, and potentially ever)

There are multiple blog posts dedicated to this problem, if you want to read more and at least try to understand all the caveats and the gotchas. I am still learning those, so take this advice with a grain of salt.