without cash in a checking account, people often have to resort to predatory financial products like payday loans or high-interest credit cards in order to make ends meet.
In the testing for this product, was there a noticeable decrease in employee reliance on payday loans?
That's the goal. Having earlier access to your own earnings is a much better source of funds than taking an expensive loan. We're collecting data from early customers and will update more in the future on the progress we're seeing.
As a long-time Pythonista who's been using Ruby for work for a year now, I've really grown to appreciate anonymous multiline blocks, and wish they were a Python feature.
I am not a fan of all the syntactic variants in Ruby, and think they add some unnecessary complexity but on balance I think this is something that Ruby does better.
Parsing through this stuff makes me feel like I'm in a Stross or Stephenson novel. Does anyone know of any visualizations or interesting insights drawn from this?
Hey - founder of http://offerletter.io here - some thoughts, in no particular order.
My first thought is, get a lawyer and accountant, immediately.
My second thought is, yes, you kind of screwed up. Generally if you have the opportunity to early-exercise + 83(b), you should take it if you can afford it - it's far, far cheaper in virtually every case, especially for the really early stage.
In terms of forward action, you have a few options:
1) Do a full (or partial) exercise with your own money, pay AMT on the spread
2) Take a loan from someone to help finance the full or partial exercise, let them offset your risk in the short term.
3) See if someone (probably an investor, or your former co-founder) is willing to buy your stock back (probably at a discount)
4) Do nothing and see what happens over the next few months/years, and only take (a potentially much more expensive, but also much more certain) once the company is reaching some liquidity event (or lack thereof).
Also, even though they're not "your" lawyers, per se (they are the company's) you should still reach out to the company's legal team to understand your options. And if you have a good, open relationship with the cofounder and/or board, then you have a lot more latitude in terms of next-steps as well - if they're doing well they can nicely ask an investor in a subsequent round to give you some liquidity should you desire it.
If you really believe in the company, it may make sense to exercise now and pay the taxes, but if doing so requires a meaningful portion of your net worth, you'll have to make sure you understand you're putting a lot of eggs in one basket. You would basically be going in on an asset that is opaque, and statistically failure-prone. But if you believe in it, it may be worth it. Maybe.
Drop me a line [ mallyvai at offerletter dot io ] if I can be helpful here more specifically too.
No easy solutions - all have tradeoffs - but it's definitely a manageable situation. Disclaimer: I am not a lawyer or accountant, this is not intended to be formal legal or tax advice, etc etc.
Yeah I kind of figured I made a bit of a mistake... It wouldn't have been fun but I could have afforded to lose $20k earlier this year (buying at strike + paying tax then). Now, with the value of the company in the tens of millions, I'd be looking at somewhere around $100,000+ in taxes, which I certainly do not have :\
I'll reach out to my former partner and legal team. We're all on good terms and I still give advice, direction to the engineering team when they need it.
Thanks for the input and offer to follow up. This is why I keep coming back to HN :)
Founder of http://OfferLetter.io here - Harj, love what you're doing with a common YC app, and the spirit of the hiring manifesto.
I'm curious about your approach to making sure the candidate experience is really top-notch since it's still your platform, and how deep you plan on going - even good startups may put forth exploding offers, lowball candidates, forget candidates due to high-pressure sales tactics, etc. This doesn't leave a great taste in engineers' mouths.
Pure top-of-funnel filtering is important, but seems oversaturated. The candidate experience and matchmaking process seem like the real differentiators. What do you feel is the best way to address these?
Patrick's got a ton of great insight into salary negotiations, and this post is no exception. Everybody (especially engineers) - needs to get comfortable talking about compensation and wages in safe spaces. This shouldn't come from a sense of ego, but from a much more humble and sincere sense of information-sharing.
The people who are hurt the most by keeping compensation info secret are precisely the ones that need the information the most - folks from low income backgrounds, people worried about making more than their parents, etc.
As a practical tip, one thing I encourage everybody who's a client to model their equity grant in a simple excel spreadsheet. You need to know
* your strike price
* preferred share price
* company valuation
* total # shares outstanding
As a rule of thumb you can assume your shares are "diluted" (that is your total % ownership relative to valuation) will decrease anywhere on the order of 15%-40%) after each funding round depending on company's performance. Plotting this beforehand, along with where you believe the company will end up, will give you a great sense of what your equity is worth.
[Source: I founded http://OfferLetter.io - We help engineers and other tech workers get what they're worth. If you're interested in free data, you should join Offer Drive (http://offerletter.io/drive.html to learn if you're paid fairly]
I have incredibly mixed feelings about this. Zero-negotiation policies are great tools for eliminating unfairness if executed well, the problem is that you still force the employee to end "trusting someone at their word", and every company claims they're going to make a fair, standard offer. Here's the thing:
1) Yes, being strict and almost formulaic will reduce inequality and increase probability that folks are compensated according to actual value.
2) But you need meaningful transparency around this. I guarantee you, 100% that if I had a live offer at Reddit, I could find some way to negotiate some additional crap that amounted to a meaningful compensation bump in the end.
3) Every company that does this ends up making exceptions for people the higher-up you go. Wealthfront, Stack Exchange, and now Reddit, will join the club of companies that negotiate with execs they hire, VCs, and bizdev partners, suppliers - basically, everybody except their employees. And even then only "most of the time"- there are always exceptions - just hold out for a higher comp band. Get a stronger inside referral. It's always possible.
Ellen, Alexis - If you're reading this, I'd love a chance to understand your challenges in crafting these policies, and see if I could offer any input from my perspective as well.
(Source I founded http://OfferLetter.io - we help engineers and other tech workers negotiate for what they're worth. I've personally had literally hundreds of conversations with folks about this.)
I imagine each partner will have different answers. One thing I say is that we should be willing to fund anything that could be a $10B company, and that is such a difficult restriction we shouldn't have any other restriction.
Personally, I am very interested in nuclear energy and solar (I think energy is the highest-impact single thing to fix--it's remarkable how many other problems reduce to the energy problem), biotech, AI, education, healthcare, and online communities.
Interestingly, those first three categories are also where I think the biggest dangers to humanity are. High-risk high-reward, I guess.
What do you think about wind energy? A leading wind energy company here in India just had a $160M IPO here and it was oversubscribed. Wind is also growing faster than solar in large parts of the world.
1) A lot of people do make money off of employee stock, you just have to be reasonably intelligent about it. This blog post is a good way to model risk/reward.
2) Thinking of your employer as your enemy is a great way to set yourself up for failure.
3) Don't think of stock as worthless, think of it as a bunch of lottery tickets. It has some probability of being worth something based on the lottery.
The lottery comparison would be fair if the organization running the lottery was incentivized to not pay you if you won and could very easily, in both a legal and acceptable-in-the-course-of-businesss way, deny you your winnings. You are basically relying on a huge pool of people who are making the decisions to be a nice guy and true to their word.
I'm not suggesting you consider your employer an enemy, there's obvious a mutual benefit to you working there, but never should anyone assume a business has your best interests at heart because they almost never do.
