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0 pointshunter238y ago0 comments

Given that the Bay area has the highest cost of living in the US, I think 10 years is a lot to wait for payout. In that time you could have got married, had kids, bought a house, had a parent get sick, get divorce, etc. People have real lifestyle changes which make the extra $$ important to them over a 10 year period.

The standard pitch (that many recruiters abuse) was that your options would become real in 4 years but the reality is this is closer to a decade. If companies were marketing their options realistically instead of selling them like snake oil the 10 year point would be fine.

I remember interviewing with an almost unicorn and their VP of engineering literally tried to pitch their options by telling me to assume the company would IPO at XXX price within 4 years. No mention of opportunity costs, tax issues, liquidity issues, etc. He even forget to consider the strike price when "helping" me ballpark the benefit. And everyone seems to forget there is thing called the discount value of cash - $200K in 10 years is not the same as $200K in 5. It's been 2 years since I got that unicorn offer and I can say that the company is at a minimum still 4 years away from an IPO.

Stop selling the snake oil and people wouldn't be unhappy when there is a decade long payout time.

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TallGuyShort8y ago

My point is more that people seem to look at going public as the one true sign of enterpreneurial success. I worked at a privately owned start up in which maybe 4 employees held all the equity, and the other 200 were simply salaried or paid hourly, and you know what came up in every Q&A? "When are we going public?" It doesn't seem like many people talk about their vision for their start ups being sustainable, or that many people think about the implications of going public for the business itself. Personally, I would be hesitant to invest much time in becoming a client of a company that was rushing to go public because it needed the cash and private investors weren't cutting it or because most of the company wanted to cash out. It's a red flag to me.

But more to your point, recruiters lie, and if you don't realize that as a grown up, college graduate, you've got bigger problems in your life, I suspect, than when a company decides to file IPO. They shouldn't lie, but recruiters tempting you with options also isn't a reason to suddenly submit to the SEC and public traders to get some cash.

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TallGuyShort8y ago

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