This is a short, but comprehensive, guide to stock options, with specific example outcomes for employees and a sprinkle of Bayesian modeling of your chance to cash out with at least $1M. Unlike other guides, this is not a stream of financial terminology. Instead, it is specific and answers the...
This is a short, but comprehensive, guide to stock options, with specific example outcomes for employees and a sprinkle of Bayesian modeling of your chance to cash out with at least $1M.
Unlike other guides, this is not a stream of financial terminology. Instead, it is specific and answers the real questions with concrete examples. "What happens if I have vested and unvested stock options and the company is acquired?" and the like.
Most of all I tried to provide tools for tackling the main question: "Is it worth it?"
Topics covered: basics, how startup exits work, possible outcomes for stock options holders, taxes, dilution, how long you will wait, and how lucky do you have... (read more)
Thank you!
Previously I thought stock options were improbable to pay off. After doing all the research for this guide I updated towards stock options being even more risky. My intention in writing this guide wasn't to prove stock options are worthless, but I see a lot of readers making this conclusion, and I understand why. As you said, it's a minefield of technicalities.
My softer personal takeaways:
- Never expect to get rich via stock options, no matter if you think the company will go to the moon or not.
- Early in your career, up to and maybe including Senior dev roles, stock options are just not worth it. You get little equity, so no big
... (read more)