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How Valuable Are Stock Options Offered By A Startup?

Startup Professionals Musings

By the way, you will normally only be offered “options,” which vest over a 4-year period after a 1-year “cliff.” 7% Product Manager,2 -.3%

A Different Approach to Refreshing Stock Option Grants

Feld Thoughts

It’s the annual bonus, next year bonus plan, option grant refresh cycle. I’ve never really understood why the majority of stock option refresh grants are stacked grants mid-way through the granting process. Assume you hire someone and grant them 10,000 options with monthly vesting of four years with a one year cliff.

Should founders get Stock Options?

StartupCFO

Founders often ask me whether they should be asking for stock options in their own company. The post Should founders get Stock Options?

How Often Do Employees Of VC-backed Startups Get Stock Options?

Ask The VC

Question: How often do venture-backed start-up employees (let’s say non-executives) get stock option grants? ” It’s pretty standard for every employee of a VC-backed company to get at least a minor option grant as part of their compensation. Equity employees equity stock optionsNever?

How Many Startup Stock Options are Enough?

Startup Professionals Musings

By the way, you will normally only be offered “options,” which vest over a 4-year period after a 1-year “cliff.” 7% Product Manager,2 -.3%

Startup Stock Options Are Not Reliable Compensation

Startup Professionals Musings

By the way, you will normally only be offered “options,” which vest over a 4-year period after a 1-year “cliff.” 7% Product Manager,2 -.3%

Advisor Stock Option Grants

The Startup Lawyer

Stock Options One asset that startups should consider taking advantage of is advisors. Luckily for startups, advisors are prevalent and can be readily found through incubators, networking and/or personal contacts. The best advisors are in it to pay it forward or give back to the startup community.

Incentive Stock Options (ISOs)

Recent Buzzes - VC Experts, Inc.

Incentive stock options must be issued pursuant to a "written plan" which includes the aggregate number of shares to be issued and the eligible employees (or class of employees).

How Do I Protect My Option Grant From A Down Round In The Future?

Ask The VC

What should I expect in terms of protection from both dilution and going under-water on my option prices given that I will be joining before term sheets and close of the round? Will my options be priced based on the previous round? Can I ask for some guarantees about % ownership and stock price post-funding?

How to Discuss Stock Options with Your Team

Both Sides of the Table

Options are gravy - I lived through the first dot com era where we used stock options as a recruiting tool. I think you will.

Legal Checklist for Startups

Scott Edward Walker

I’ve been a corporate lawyer for 17+ years, and there are certain fundamental legal mistakes that I’ve seen startups repeatedly make.

The Treatment of Stock Options in the Context of a Merger or Acquisition Transaction

Recent Buzzes - VC Experts, Inc.

A principal issue in merger and acquisition transactions is whether, and to what extent, outstanding options will survive the completion of the transaction and whether and when the vesting of options will be accelerated

Who are stock certificates issued to and when?

Ask The VC

If you buy the stock, you get the certificates. The options can not be exercised until vested, as you suggest.

Quick & Dirty How-To: Employee Stock Option Allocations

Christine.net

For a company that has raised a first institutional round of capital, this question is important not only when making competitive job offers, but also when calculating what size option pool the company will need before raising the next round of capital. Most option grants are near the bottom of the ranges. CEO 5 - 10. COO 2 - 5.

How to Explain Stock Options to Employees

Fresh Inc.: The Staff Blog

If your employees make a mess of their options, it hurts you more than you think. But doling out the options isn’t good enough.

Why the Founder of KIND Snacks Gives All His Employees Stock Options

Fresh Inc.: The Staff Blog

Daniel Lubetzky, founder of KIND Snacks, describes his egalitarian approach to business

ESOP Fables: Reviewing The Myths And Facts About Employee Stock Ownership Plans

YoungUpstarts

Employee stock ownership plans (ESOPs) can be an attractive way for an owner to sell a company and for employees to gain an ownership stake.

Adding a Co-Founder In 140 Characters Or Less

FairSoftware's Blog

Tags: Uncategorized advice compensation entrepreneur entrepreneurship equity incorporation revenue sharing shares startup idea stock options

How much should you pay an executive in a startup company?

Startup Company Lawyer

Tags: Stock options

Can Employee #1000 Get Rich Off of Stock Options?

Ask The VC

5 Questions You Should Ask Before Accepting a Startup Job Offer

Fresh Inc.: The Staff Blog

What you need to know about stock options, pay packages, and what you''re really getting offered

Why Paying Your Workers in Stock Can Be a Tough Sell

Fresh Inc.: The Staff Blog

Stock options are an attractive proposition for certain companies, but you shouldn't buy into the practice lightly

Google Stock Option Re-pricing: Get Over It

abovethecrowd.com

Prominent finance publications like the WSJ and the Motley Fool along with several bloggers have recently taken shots at Google with respect to their decision to re-price a boat-load of employee stock options. Internet Uncategorized Web/Tech Finance Google options stock options

What the Impending Unicorn Kill Off Will Mean for Startup Employees

Fresh Inc.: The Staff Blog

Getting stuck on the horn of a unicorn is risky business for anyone counting on riding their stock options

Stock Option Plan Rule of Thumb No. 1

Business Plan Blog

Reserve 10-20% Of Your Company’s Outstanding Equity For A Stock Option Plan. It is critical for a start-up to consider this reality and reserve 10-20% of its outstanding equity for a stock option plan. 2: Issue Options According To Value Added And Risk Taken. Whatever the percentage, it pays to plan ahead.

Early stage boards work for stock options, not cash.

Berkonomics

Pay early stage board members of companies that are not lifestyle businesses one percent of the fully diluted equity in the form of an option that vests over four years of service. Inside board members, CEO and any other paid employees are not paid for board service in either stock options or cash. Email readers continue here.]

Stock Option Plan Rule of Thumb No. 4

Business Plan Blog

If a director or advisor’s term is discontinued, a lenient post-termination exercise period may be very valuable to an option holder. I advise clients to draft the option grant to permit exercise up to ten years after termination, depending on when the option was granted in relation to when the option plan was adopted.

Stock Option Plan Rule of Thumb No. 5

Business Plan Blog

For advisors, I recommended that companies avoid too much specificity, but nail down the length of service and the option terms, include an indemnification provision, and provide for confidentiality in a written advisor agreement, the term of which may be terminated at any time. This article was contributed by William W Eigner, Esq. &

Stock Option Plan Rule of Thumb No. 3

Business Plan Blog

Gradually vesting a director’s and advisor’s options align their compensation with their actual service while protecting the company in the event that they are prematurely removed from the board. Options issued to advisors are typically treated the same, so long as the advisor is not otherwise being compensated by the company.

Retaining employees: Structuring a Stock Appreciation Rights program

Active Garage

Stock options have historically played a key role in providing incentives for these individuals to stay. Not to worry. Good luck!

Stock Option Plan Rule of Thumb No. 2

Business Plan Blog

Issue Options According To Value Added And Risk Taken. Options are often issued as a reward, either for services rendered or risk assumed by the recipient. This article was contributed by William W Eigner, Esq. & & Brian Headman of Procopio, Cory, Hargreaves & Savitch LLP. . Comments comments Powered by Facebook Comments.

The Right Way to Grant Equity to Your Employees

Redeye VC

is the virtually universal practice among tech companies of distributing meaningful equity (usually in the form of stock options) to ordinary employees. Before companies like Fairchild and Hewlett-Packard began the practice fifty years ago, distributing stock options to anyone other than top management was virtually unheard of.

Facebook, Microsoft, and Employee Stock Options=Fraud?

charliecrystle.com

Like a lot of people, I’ve dismissed the Twins case against Zuckerberg and Facebook as sour grapes; yes, they had a bit of a claim, but the real work is in building a compelling app and getting people to use it. Not knowing the details, the settlement seemed fair; connecting people through a website was [.]. Startups

Stock options: Guard the Gold

Berkonomics

Use stock options and warrants to pay for service only rarely. Earlier, I stated that stock options are the currency of early stage business. There are times when services of others are available for stock instead of – or in addition to cash. This truth is obvious when a start-up has no cash. Growth!

Do You Need To Be A Corporation To Raise VC Funding?

Ask The VC

The second issue is issuing stock to employees. Since stock options are the chief motivator of employees at a startup, you need have a stock option plan. In a LLC, there is no concept of stock ownership. Question: Does one need to switch an LLC to a corporation to raise VC funding?

The right way to give equity to your employees

The Next Web

stock, options, warrants). Usually this is fine, provided that important key parties (e.g., Entrepreneur employees equity startup

Startups Should Invest in a Quality Scanner

The Startup Lawyer

These documents range from the startup’s bylaws to stock option agreements to third party contracts to prior financing documents.

Burnham's Beat: Expensing Stock Options and the NVCA: Crying.

Burnham's Beat

Software Stocks Update: March 2006 » 03/22/2006. Expensing Stock Options and the NVCA: Crying Wolf Is Hard To Live Down. Like Lee, I went to many events in Silicon Valley where the CEOs of public technology companies gave impassioned speeches about the evils of expensing stock options. Stocks. Stocks.

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How Much Stock to Ask For When Joining a Startup

Startup Professionals Musings

By the way, you will normally only be offered “options,” which vest over a 4-year period after a 1-year “cliff.” 7% Product Manager,2 -.3%

The Biggest Hiring Mistake You Can Make

Fresh Inc.: The Staff Blog

Future stock ownership granted through a stock option is the best compensation tool in your arsenal right now. It''s everywhere.