hey everyone - unfortunately just got laid off for the first time in my career. upon hiring, they gave me $5k equity options. do I lose it it? what are my rights here? thanks
What happens to my equity when laid off?
17
braintank
Politicker
8
Enterprise Account Executive
If you were employed <1 year it's unlikely that any vested.
If employed >1 year you typically have 30-90 days to exercise.
If employed >1 year you typically have 30-90 days to exercise.
TennisandSales
Politicker
4
Head Of Sales
check the paperwork.
You should have details on this in your offer letter, or in a separate document.
It should call this out specifically.
Normally there is a vesting period. Which means, you may have to be employed for a certain time period before any of your equity means anything.
Pretty common to have a minimum of a one year vesting period.
Check the docs.
You should have details on this in your offer letter, or in a separate document.
It should call this out specifically.
Normally there is a vesting period. Which means, you may have to be employed for a certain time period before any of your equity means anything.
Pretty common to have a minimum of a one year vesting period.
Check the docs.
jefe
Arsonist
3
🍁
Do a careful review of your employment agreement.
Has the company gone public? What's the likelihood of it actually being worth something?
Has the company gone public? What's the likelihood of it actually being worth something?
CatMom
Politicker
2
Account Executive
Yeah I don’t know that I’d even want to exercise them if they’re laying ppl off. Unless it’s a big company. But if it’s a small start up I’d just walk away
jefe
Arsonist
0
🍁
Exactly this
LordOfWar
Tycoon
2
Blow it up
As others have said check your paperwork but it also might be worthwhile to reach out to a free legal agency.
saaskicker
Celebrated Contributor
2
Enterprise AE
if your company is laying people off it's hard to imagine you want to buy that equity if it's vested...
LordBusiness
Politicker
1
Chief Revenue Officer
Check your paperwork, but given tenure I’d be willing to bet the equity doesn’t leave with you
LoneMaverick
Executive
1
Strategic Account Leader
As others have said it depends on how long you were employed.
Typically options and RSUs have a 4 year beating schedule with a one year cliff. Meaning that after 1 year you have earned 25% of your options with the remaining 75% vesting monthly over the next 3 years.
Also, once you leave a company you have a limited time to exercise/sell your vested shares. Usually 90 days.
Typically options and RSUs have a 4 year beating schedule with a one year cliff. Meaning that after 1 year you have earned 25% of your options with the remaining 75% vesting monthly over the next 3 years.
Also, once you leave a company you have a limited time to exercise/sell your vested shares. Usually 90 days.
JDialz
Politicker
0
Chief Operating Officer
If they’re vested they are yours. Delivered to your custodian in your name.
That’s when somebody like me comes in to de-risk your assets while maintaining an aggressive tack, based on your goals and time horizon of course.
That’s when somebody like me comes in to de-risk your assets while maintaining an aggressive tack, based on your goals and time horizon of course.
therealmilsch
Executive
1
VP Sales & Deal Flow
Everyone mostly covered it.
1. Check your paperwork. It probably won't be in your employment contract, but in a separate equity agreement. It will provide detail on how/when equity vests as well as scenarios if you leave on your own will, if you are terminated, or if there are layoffs.
2. In that agreement, it will state your share/equity allocation. It will also state a Vesting Schedule. Many times its 25% immediately, after the first 6 months, or after a year. Then 15%/year for the next 5 years.
3. You WILL have to purchase any vested equity, equity isn't handed to you. So, whatever percentage of shares are vested, you will have to pay for the original value of those shares, as well as the tax liability of the profit between your exercise price and the current valuation of the company.
4. As @saaskicker stated - it might not be the best idea to buy shares of a company going through layoffs.
Regardless - you should have all the information available to you. Best of luck in making the correct decision for you and best of luck looking for a new role.
1. Check your paperwork. It probably won't be in your employment contract, but in a separate equity agreement. It will provide detail on how/when equity vests as well as scenarios if you leave on your own will, if you are terminated, or if there are layoffs.
2. In that agreement, it will state your share/equity allocation. It will also state a Vesting Schedule. Many times its 25% immediately, after the first 6 months, or after a year. Then 15%/year for the next 5 years.
3. You WILL have to purchase any vested equity, equity isn't handed to you. So, whatever percentage of shares are vested, you will have to pay for the original value of those shares, as well as the tax liability of the profit between your exercise price and the current valuation of the company.
4. As @saaskicker stated - it might not be the best idea to buy shares of a company going through layoffs.
Regardless - you should have all the information available to you. Best of luck in making the correct decision for you and best of luck looking for a new role.
FinanceEngineer
Politicker
0
Sr Director, sales and partnerships
Should be able to execute the vested amount within 30 or 90 days. You will have it writing in the equity contract that you signed.
therewardistheeffort
Member
0
Enterprise Client Partner
thanks everyone !
AnchorPoint
Politicker
0
Business Coach
There should be a vesting clause in your agreement.
WholesomeGuy95
Good Citizen
0
Area Sales Manager
Lot of good comments here- there is also some great equity explanation content on YT. I won't plug any companies here but its worth listening to a 15 min explanation of the basics as you'll learn stuff that will help when you negotiate your next job.
CuriousFox
WR Officer
0
🦊
I'm sorry to hear this man. I hope you bounce back soon.
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