[drchopchop]

What happens if you have an underperforming employee and end up having to fire them in the first 3-6 months? Do you really want to give them permanent equity in a company before they've proved at least some value? Some sort of clawback structure would be necessary here.

[borishn]

Employees take less cash in exchange for equity. They earn the equity as a part of compensation. Under what theory you want to claw it back?

In addition employers are protected by a vesting cliff, and after that it is their fault if they keep underperforming employee around.

[choppaface]

In the case of 83b, the unvested shares are returned. Even the bonus-to-cover can be returned contractually—- the bonus-to-cover never even has to hit the employee’s bank account.

RSUs are probably better but the equity games are set up right now such that startups issue options.