[berberous]

It was an option, not a requirement. There are pros/cons to doing it, but it was ultimately the employee’s decision. I’m sure the risks were well disclosed. The issue is >50% of employees don’t understand any of it, no matter how well explained and disclosed.

[wly_cdgr]

It is not enough to disclose the risks. You can not allow your employees to do this unless at the minimum you can demonstrate that they actually and fully understand those risks and you give them access to ALL the numbers you have

[berberous]

I would bet money Bolt disclosed financial statements and all material information as part of this offer.

The risks here are not rocket science. If the most recent round of preferred stock financing was $100, and your exercise price is $20, the risk is that if the stock ends up being worth less than $20, it's a mistake in hindsight. You can talk all day about the risks, the numbers, etc. What's currently happening is macroeconomic -- inflation, fed tightening, asset prices dropping across the board, etc. This was not some Bolt-specific issue. People assumed it was more likely that the stock would be worth at least their exercise price (which still may be the case). A full half of the people this was offered to declined, because they were prudent and the risks were probably clear. The other half was probably optimistic, and also gambling on crypto and other startups at the same time.

[nilsbunger]

With the preference stack it could take much more than a $20 price to break even.

It may not be rocket science, but this isn’t obvious unless you’re really savvy about startup deal structure, and all of the preference stack is disclosed.