As i'm sure we are all aware, many tech startups never list (althought the public appetite for this may change over the next few years) and for that matter may not be bought by a public company.
With this in mind, it is interesting to consider how your options/stock are executed/valued/redeemed when a startup is acquired by a another private company. Also consider an outcome where the startup matures and acheives a high level of profitability. The founders may not desire a sale of the company. What happens to employee options then? (I have no idea) In this scenario, a x% ownership maybe be an attractive ongoing bonus scheme for early employees. That said, there are other ways to motivate key employees apart from ownership (autonomy, titles, lifestyle, flexible hours, OS travel, cool tech toys and lots of widescreen monitors, company working holidays eg beach in summer, snow in winter - company dinners and events etc) >From my experience, the key people who have helped us build companies in the past cared more about lifestyle and working on interesting work than options and equity. But your right in thinking you will never get those key entrepreneurial types on your startup if you dont have equity on the table - that said, most of these ppl are working on their own startups anyhow :) Thanks for stimulating the discussion. Nick On Tue, Nov 11, 2008 at 11:21 AM, Hendro Wijaya <[EMAIL PROTECTED]>wrote: > Wow..the response here is fast. Thanks all. > Anyone else has any thought on this subject, please? > > > > On Tue, Nov 11, 2008 at 11:16 AM, Sriram Panyam <[EMAIL PROTECTED]>wrote: > >> Howdy, >> >> >> I thougth that was only for public companies. I suppose for a private >> company (or a startup) that translates to getting the XX % as the initial >> "share price" is zero right (if not zero if you take negative cash flows >> into account)? >> >> cheers >> Sri >> >> On Tue, Nov 11, 2008 at 10:50 AM, Maxim Shklyar <[EMAIL PROTECTED]>wrote: >> >>> As little as I know it works like this: >>> >>> You not get 0.0..% , you get an option to buy X shares at >>> a given price (normally the share price when you started working). When you >>> want to execute the options if the share price is higher, than you get >>> something, otherwise not.. >>> >>> The X shares you get are vested over some time (like 2 >>> years) – if you quit after 1 year you only get X/2.. >>> >>> >>> >>> http://en.wikipedia.org/wiki/Employee_stock_option >>> >>> http://en.wikipedia.org/wiki/Vested >>> >>> >>> >>> >>> >>> --- >>> >>> Maxim Shklyar >>> >>> kisla interactive >>> >>> >>> >>> >>> >>> *From:* silicon-beach-australia@googlegroups.com [mailto: >>> [EMAIL PROTECTED] *On Behalf Of *Hendro Wijaya >>> *Sent:* Tuesday, 11 November 2008 9:53 >>> *To:* silicon-beach-australia@googlegroups.com >>> *Subject:* [SiliconBeach] Employees' stock agreement >>> >>> >>> >>> Hi All, >>> >>> My name is Hendro and this is my first post here. :) >>> I'm curious on how the agreement works for the company that want to give >>> their employees some stocks options (like Google / Microsoft for example). >>> Are they talking in terms of % like "I give you 0.02%?". That doesn't sounds >>> so appealing. >>> >>> I have a plan to hire some early developers. They will be given some >>> salary like usual but, to ensure they have common interest to drive the >>> company forward, I would love to do some profit sharing scheme in a scalable >>> way. >>> >>> Any thoughts? >>> Thanks! >>> >>> Cheers, >>> Hendro >>> >>> >>> >>> >> >> >> -- >> Blog: http://panyam.wordpress.com >> URL: http://www.geocities.com/spany_1 >> >> >> > > > > --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "Silicon Beach Australia" group. To post to this group, send email to silicon-beach-australia@googlegroups.com To unsubscribe from this group, send email to [EMAIL PROTECTED] For more options, visit this group at http://groups.google.com/group/silicon-beach-australia?hl=en -~----------~----~----~----~------~----~------~--~---
