Ouyang Yadong oyyd

Who pays when startup employees keep their equity?

JD Maturen, 2016/07/05, San Francisco, CA

As has been much discussed, stock options as used today are not a practical or reliable way of compensating employees of fast growing startups. With an often high strike price, a large tax burden on execution due to AMT, and a 90 day execution window after leaving the company many share options are left unexecuted.

There have been a variety of proposed modifications to how equity is distributed to address these issues for individual employees. However, there hasn't been much discussion of how these modifications will change overall ownership dynamics of startups. In this post we'll dive into the situation as it stands today where there is very near 100% equity loss when employees leave companies pre-exit and then we'll look at what would happen if there were instead a 0% loss rate.

What we'll see is that employees gain nearly 3-fold, while both founders and investors – particularly early investors – get dilute

This example is inspired by Calendar View and Trulia Trends. You can toggle the displaying type to see either the level of values or change trends in each day. Thank air-scientific.com for the pm2.5 data.

Installing V8 on a Mac

Prerequisites

Install Xcode (Avaliable on the Mac App Store)
Install Xcode Command Line Tools (Preferences > Downloads)
Install depot_tools
- $ git clone https://chromium.googlesource.com/chromium/tools/depot_tools.git
- $ nano ~/.zshrc
- Add path=('/path/to/depot_tools' $path)

	const t = require("tcomb");
	// imstruct is a tcomb type builder that internally builds an
	// Immutable.Record object, but applies tcomb's type system to it
	const imstruct = require("../util/imstruct");

	const Person = imstruct({
	name: t.String,
	age: t.Number
	});

	/*
	DO WHAT THE FUCK YOU WANT TO PUBLIC LICENSE
	Version 2, December 2004

	Copyright (C) 2016 Esa-Matti Suuronen <[email protected]>

	Everyone is permitted to copy and distribute verbatim or modified
	copies of this license document, and changing it is allowed as long
	as the name is changed.

	#!/bin/sh

	##
	# Install autoconf, automake and libtool smoothly on Mac OS X.
	# Newer versions of these libraries are available and may work better on OS X
	#
	# This script is originally from http://jsdelfino.blogspot.com.au/2012/08/autoconf-and-automake-on-mac-os-x.html
	#

	export build=~/devtools # or wherever you'd like to build

	If you get this error on Ubuntu 14.04.1 LTS then you need to copy /lib/libtsocks.so

	$ sudo cp /lib/libtsocks.so /usr/lib/libtsocks.so