Is Early Exercise a Good Option Grant?

#4: Equity, stock options, and other compensation; a complex topic that has essentially limitless negotiable options. We are going to be walking through the basics to lay a foundation and then we will break down the most common mistakes that people make in this area. If you need to know more about offer letters, vesting stocks, and managing exits this episode is for you!

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Lynda Galligan: Goodwin Profile
Anthony McCusker: Goodwin Profile

 

Full Show Notes:

• [0:00] Welcome to The Skip!
• [2:30] Introducing our guests Anthony McCusker and Lynda Galligan - Attorneys at Goodwin Procter
• [4:00] Our first example: Startup X offers you an equity package
• [10:00] What questions do you typically want to make sure that the employee just sort of understands when they're looking at compensation?
• [12:30] Is the number of shares in the offer important? Balance against the percentage of shares available
• [16:30] Tax liability when a company has more value on paper than reality
• [21:30] An 83B election
• [14:30] Vested options vs unvested options
• [27:30] Post-termination exercise periods
• [29:30] Incentive Stock Options or ISOs
• [37:00] Exploring rainy day scenarios
• [41:00] You have stock options but the market or company value is going down. What do you do?
• [43:00] Risks that are specific to private company scenarios
• [45:00] 409A evaluations
• [48:00] Important tax stipulations that disallow repricing the same option
• [49:30] A reminder that none of the conversation today should be regarded as legal advice
• [50:00] Thank you Anthony McCusker and Lynda Galligan!
• [51:30] Episode summary and wrap up with Nikhyl

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The Skip podcast helps tech professionals get ahead in their career. It’s hosted by Nikhyl Singhal, a successful founder, head of product, and executive. He coaches more than 100 executives, managers, and rising stars navigate important career decisions, management challenges, and personal crossroads to maximize their happiness and professional life.

Join entrepreneur, coach, and Facebook VP Nikhyl Singhal as he offers guidance on navigating important career decisions, management challenges, and personal crossroads. For many, career is one of the most critical parts of identity. Yet most people don’t have a clear sense of how to maximize their current position, evaluate job transitions, or invest in the right long-term skills to optimize their professional life. Unfortunately, if you work at a company, your manager is rarely capable or incentivized to help you develop the necessary skills or to think through transitions. And most self-help books and articles focus on your current role, not on the next one or on any sort of long-term career roadmap.

Nikhyl advises nearly a hundred leaders on their tech careers. Nikhyl is certain, however, there are many others also looking to become more intentional about their career choices – which has led him to produce this podcast. Each edition, Nikhyl will dive into some of the common questions he encounters and give his distinctive insight with the hope of reaching as many people as possible. Though Nikhyl mostly works with tech leaders, he believes the themes apply to anyone looking to shape a fulfilling career.  

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit theskip.substack.com