[JumpCrisscross]

> options are generally worse than a lottery ticket, because the terms of ownership % can be changed later in closed board meetings, then you're screwed

This is demonstrably false given there is a market value for common stock in private companies, even early ones, whereas few people would pay face value for a secondhand lottery ticket (even assuming zero risk of scam).

[PopAlongKid]

>given there is a market value for common stock in private companies, even early ones

I don't understand what you are talking about. I exercised stock options in a dot com startup within its first year and at no time in the ensuing eight years was there ever a market where I could sell my stock, which eventually became demonstrably worthless. As someone who knew more about it than me later explained, he didn't exercise his options because he knew there would always be millions of dollars in line ahead of him, because of the "board meetings", as stated.

And why wouldn't someone pay face value for a valid lottery ticket from a private party, if more convenient than going to an official seller?

[JumpCrisscross]

> he didn't exercise his options because he knew there would always be millions of dollars in line ahead of him, because of the "board meetings"

You’re describing standard liquidation preference. There are shenanigans Boards can get up to, but assuming you’re incorporated in Delaware, there are limits.

[blackeyeblitzar]

I am not sure what you mean by “market value”. What’s the market exactly when employees cannot freely trade their vested options? Most companies restrict that, which is very unjust. For a secondhand lottery ticket, if there is zero risk of scam, I’d say its value is at least its original retail value, and there is no restriction on trading it. So if someone wanted to make a market, they could.

[JumpCrisscross]

> What’s the market exactly when employees cannot freely trade their vested options?

The underlying stock, including with companies that restrict transfers, is traded to the tune of hundreds of billions of dollars a year.

> if there is zero risk of scam, I’d say its value is at least its original retail value

Why would you ever pay a premium? It’s worth at most the cost of a new ticket; the discount is because you’re offering liquidity. The only way it could command a premium is in convenience.

[blackeyeblitzar]

> The underlying stock, including with companies that restrict transfers, is traded to the tune of hundreds of billions of dollars a year.

Can you explain this? How are they traded if they are restricted?

[JumpCrisscross]

> Can you explain this? How are they traded if they are restricted?

Board approvals, forwards, SPVs. Uber, Airbnb and Neuralink rarely formally recognised transfers, but the shares are liquid for anyone with more than $100k, more so $1mm.

[mavelikara]

> This is demonstrably false given there is a market value for common stock in private companies

For most startups no body is making a market for common stock. So I don’t understand what you mean by market value here.

IRS does impose that startups do a valuation process. Is that what you meant?