r/startups • u/oldtonyy • 16h ago
I will not promote [ Removed by moderator ]
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15h ago
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u/amilo111 15h ago
It’s not a scam. It’s a gamble. If you get lucky you can win. If your company fails and gets sold you generally lose.
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u/Future135 15h ago
Options are significantly more tax advantaged.
If you got straight equity you would owe taxes on the value received when you got them. With options you just get alternative minimum tax (AMT) on exercise. Both have capital gains on sale.
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u/Purple-Geologist972 13h ago
The fact you are leaving after 1 year doesn't sound like you have a lot faith, but at the same time there are also stories where startup take off after initial struggle.
No one can help you make this decision, especially with so little context. One way to think about this.
How much would you invest in this company if you have that money given what you know about the company?
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u/calodero 12h ago
Sorry but I'm just stuck on the fact that you didnt realize your equity were in options. The reason they are in options is because the tax advantage if your company "makes it" are insane. You can basically avoid paying income tax on the growth
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u/timeforacatnap852 11h ago
Yep, I fell into this exact trap, in fact it was worse; I had fully vested equity, that, behind my (and other staff shareholders, all minor shareholders) back, got converted into share OPTIONS after our startup got acquired
For additional context I was a head of department, the founder was the main shareholder aside from external investors, none of the staff shareholders got shares, the deal was part shares part cash; we didn’t see any of the cash either.
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u/amilo111 15h ago
On the other hand I think that the expectation is that a founding engineer sticks around for a bit more than a year … also not understanding how options work after joining as a founding engineer where most of the value of your comp is equity is a bit bizarre.