buckeyenation

Put that equity down, its not as cool as you think. Have you heard of Alternative minimum tax (on paper gains?!)

People hear equity, and the bitcoin-side of their brain starts frothing. "Maybe this 7th best sales productivity app will IPO like facebook did"...

Please people - research Alternative minimum tax before you go accepting as part of your offer. If you leave a company and take the equity with you, you might have to pay tax on the PAPER gains. Yeah, I know - brutal. Google it. Unless it is on a path to 100M ARR imminently (like with 1-2 years), it is a crap shoot. Focus on the $$ comp. If you wanted equity and a massive pay out, found something.

💴 Money Management

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punishedlad

Tycoon

Business Development Team Lead

"bitcoin-side of their brain" hahahahaha
This is good advice. I encourage anyone in this position to consider it.
At 23 when I was offered equity I had dreams of being a millionaire by 26.
Company laid me and 2/3's of the whole org off within 9 months :^)

Maximas

Tycoon

Senior Sales Executive

LMFAO!

Space_Ghost20

Valued Contributor

Account Executive

I've never actually stayed at a startup long enough to take equity with me.
And, quite frankly, when I was switching careers to go into tech, startups were the only ones to even interview me.

Sunbunny31

Politicker

Sr Sales Executive 🐰

Offered equity twice. First time, the company laid everybody off and sold off the tech to another firm. I got zero dollars. Second time, we got acquired and I got paid out in cash. But - I was not a founding member, had been with the company for three years, and got enough money to pay for half of a new car, which was not a Porsche. The $$ did go in as income, and I did pay taxes, but at the time, I wasn't a high flyer, so AMT wasn't a concern.
But these are extremely valid points! Also exercising stock - pay attention to the gains. Tax rate can be STEEP.

CuriousFox

WR Officer

🦊

Like fucking brutal.

Coastal_crusher

Politicker

Sales Director

Lmao @ “Bitcoin side of their brain” can confirm some level reptilian instinct
This comment was brought to you by team frothy

nomdeguerre

Executive

Account executive

Was offered equity but I’m the form of options which means I would have to pay $75,000 for 100,000 options in a company that maybe would be worth something or maybe nothing. Yeah, no thanks.

Gyro25

Notorious Answer

Account Executive

I have equity in the form of RSUs which don't mean jack since my former company will more than likely be acquired or run out of runway

Diablo

Politicker

Sr. AE

Great point, I have been in this before. Love your humour 😅

countingmyinterest

Politicker

Account Executive

Lmao every time someone asks me about equity, I ask them if they ever plan on being acquired/sold, how much equity is diluted on the cap table, and if they are giving options vs grants.

Most of the startups that I’ve worked at have equity options worth less than used toilet paper

buckeyenation

Acclaimed Answer

...reality: probably no acquisition. And if exit, probably dilution of somewhere between 40 and 60 percent. all of a sudden that beak sweetener is a lot less sweet.
If you want equity, found something.

TennisandSales

Politicker

Head Of Sales

ill say it over and over and over again.

NEVER take a job because of the equity. it should always be a nice to have. thats it.

FinanceEngineer

Politicker

Sr Director, sales and partnerships

Depends on how it is issued and the execution of the options. Have your accountant look it over and advise you. I also completely agree on the cash comp. That is the biggest factor.

GDO

Politicker

BDM

This is a huge issue with RSU's in Belgium as well. Altough it's only with public companies.

Justatitle

Big Shot

Account Executive

This. And all of this.

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buckeyenation

Put that equity down, its not as cool as you think. Have you heard of Alternative minimum tax (on paper gains?!)

15 comments

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