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Equity Guide for Employees at Fast-growing Companies

manual.withcompound.com · 3,167 words · saved by 1 readers

Conventional wisdom says that startup equity is worthless. While most startups fail, there’s a chance your equity will become a life-changing pot of money. This guide explains how to make the most of your equity. Suppose you join a Series A startup as the fifteenth employee. A few months in, and you’re feeling incredibly optimistic. Customer demand is skyrocketing; you can’t seem to build quickly enough to meet their needs. The startup has added six new employees since you joined and is frantically recruiting more—you’re already a “senior employee!” You’ve been offered the opportunity to “early exercise” all of the stock options you’ve been granted. This will cost you $40,000. It sounds expensive (and it is!) but say that, two years from now, your company reaches a billion dollar valuation—it’ll then cost you upwards of $400,000 to exercise this same tranche of stock options and cover all of the tax obligations. Silicon Valley is full of stories where startup employees miss out on mate

Equity Guide for Employees at Fast-growing Companies Explore chapters Close the Manual Company Equity Everything you need to know about startup stock options What to do if your company has a tender offer? What to do if you work at an “overvalued” startup? What to do as an employee if your company raises a down round? Everything you need to know leading up to an IPO as a startup employee The Complete Guide to Navigating Secondary Tender Offers: A Step-by-Step Decision Framework The Smart Way to Approach Tender Offers: Designing Your Tender Offer Decision Around Your Bigger Life Goals How to Opt

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