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by trhway 4177 days ago
> At some level, if you're a few years into vesting, and the company is successful, it may not significantly change your financial outcome to stay -- you have early stage stock in a successful startup.

somewhat related question - doesn't the huge taxes on the options exercise upon leaving make that huge difference between leaving and staying? How does people manage it? Doesn't it forces you to stay until the exit?

2 comments

I'm sure you're right there are some tax consequences; I'm definitely not an accountant, though.

In a friendly situation if the company is in good shape, there are probably lots of options, including some sort of buyback to get enough cash for the taxes, or finding an investor who'd like the shares. If the company isn't doing as well as advertised, those possiblities are probably harder to get sorted.

For the US - Depends on if you're exercising and holding or exercising and selling. If you didn't get the opportunity, or forgot, to take an 83(b) election as a founder, then you've been paying income taxes as your shares vest. If you were keen on taking that 83(b) election, your tax liability is negligible on liquidation and you pay nothing until that point for usual ISO arrangements.