>> No liquidity? He said the company went public…
>> I know people don’t get the best deals on startup equity but something doesn’t add up here
Many startups stay private for 7-10 years. Most go broke, shut down, or have face-saving acqui-hires with no economic gain. If you leave at year 1,2,3,4,5, or 6 you have to pay UPFRONT to exercise the options and pay taxes UPFRONT. But you are stuck with private stock you cannot sell. In 95% of cases, the private stock can never be sold because the company goes broke. You dont know if your company, in year 7, 8, 9, 10, or beyond MIGHT be one of the lucky 5%
If you are going to spend $100k or $500k exercising options and paying taxes, you might as well buy QQQQ or NVDA or something with better odds of success.
Many startups stay private for 7-10 years. Most go broke, shut down, or have face-saving acqui-hires with no economic gain. If you leave at year 1,2,3,4,5, or 6 you have to pay UPFRONT to exercise the options and pay taxes UPFRONT. But you are stuck with private stock you cannot sell. In 95% of cases, the private stock can never be sold because the company goes broke. You dont know if your company, in year 7, 8, 9, 10, or beyond MIGHT be one of the lucky 5%
If you are going to spend $100k or $500k exercising options and paying taxes, you might as well buy QQQQ or NVDA or something with better odds of success.