[dhd415]

>>I'm somewhat blown away by this whole thing. Leverage to finance an already-leveraged derivatives position on illiquid stock. From the issuer of said stock. Who is also the borrower's employee. That's both risky and dodgy!<<

It's risky, but not necessarily dodgy. Many employers do not even permit early exercise and I wish more did as I could have substantially reduced my tax burden in some situations. Taking loans for early exercise is risky, but ultimately, we're adults who are responsible for our own decisions. Certainly it would be bad if Bolt misled employees into thinking it was a risk-less proposition, but I've not heard anyone claiming that.

>>Bolt positions the "below $200,000" sum as a win. I don't see it that way. That's below the lower bound of the accredited investor income test. The people taking out these loans by legal definition couldn't afford the risk. Yet Bolt doubled down and gave them leverage?<<

If the aggregate loan amount to laid-off employees was $200k, that says nothing about whether they qualified as accredited investors. Further, the accredited investor designation is an arbitrary one. It's perfectly possible to not be an accredited investor and still be able to afford the risk of early option exercise.

[mike10921]

"Taking loans for early exercise is risky, but ultimately, we're adults who are responsible for our own decisions." Yes, agree. If the situation was reversed and these employees made money from their investment no one would be complaining.

My guess is overall Bolt was actually being nice to their employees and allowing them to get in early on the action (i might be wrong but i've been in similar situations and usually the intent is good)

[dhd415]

I agree. I don't see any way that Bolt benefits from having outstanding loans to employees for early option exercise, so all this criticism of them seems misplaced. Say what you want about their business model, valuation, etc., but this looks to me like an honest attempt to help employees with early option exercises. Stock options are risky at any juncture, but I appreciate having the option to exercise early as the tax benefits can be substantial.

[chris11]

Agreed. The biggest issue I have with it is only having 90 days to repay if you leave. I hope they company works with those individuals, a few people might be in some serious trouble. And I'm curious how much was loaned, it's 200k just from the people who were laid off.

But I'm not sure how Bolt significantly benefit financially from this program. And $200k is not a ton of money for a unicorn. If you're an early employee at a unicorn you can work with 3rd parties to make more aggressive financial decisions.