It's from 2007; if someone showed you this today, as what you needed to know as a hire, they'd be scamming you.
This seems like only the "first slide's" worth of what a tech employee needs to know about stock options, and not the most important things.
It's also worded imperfectly in parts, with the effect of being misleading.
If you start by looking at the lede and first paragraph, it's unclear who this is for, and seems more like a child's "book report", with no regard for the reader, nor sufficient understanding of the space that's relevant to the reader.
Perhaps this wasn't garbage in 2007, but I'm flagging it in 2025.
wiseowise · 20m ago
What would you suggest in 2025?
daveguy · 5m ago
Always consider stock options to be worthless.
braza · 5m ago
I know that we're writing on the Y Combinator-sponsored forum, but after the events of the Windsurf/Google fiasco, the exits of Instacart, and how the acquihire is scaling, is there any indication that SO is a really good incentive nowadays?
M3L0NM4N · 30m ago
This should be titled, "How Employee Stock Options Work"
Sohcahtoa82 · 26m ago
Not to mention how much it leaves unanswered.
What happens to your options if the company goes public or gets acquired before you exercise?
What if you exercise but decide you want to sell but the company isn't public?
JonChesterfield · 34m ago
This really shouldn't get the fundamental point wrong
> When an employee exercises an option, the company must issue a new share of stock that can be publicly traded.
No. When you exercise, you get the stock, but it's definitely not guaranteed to be publicly traded.
For example Graphcore gave people options, which if exercised became stock in graphcore. If you then found a buyer and asked GC to approve the sale, they declined. Not public. Later they revalued that stock at zero.
To a better approximation, stock options work if you trust the company to pay out.
cyberax · 4m ago
> For example Graphcore gave people options, which if exercised became stock in graphcore. If you then found a buyer and asked GC to approve the sale, they declined. Not public. Later they revalued that stock at zero.
From looking at Wiki, the company is basically bankrupt with just $2.7m revenue for 450 employees. So their stock is literally worth nothing.
If they do get acquired by Softbank, employees will get a portion of the sale according to the amount of shares they own. The company valuation won't make any difference.
jdcampolargo · 30m ago
> stock options work if you trust the company to pay out.
100%
alecco · 17m ago
Of course Stanford [1] paints it like a Disney movie without mentioning:
* Share Class & Rights (e.g. common stock, voting, etc)
* Tax issues and how they are structured (a friend had to pay a lot even before exercising due to bad legal paperwork)
* Dilution
* "Market price" nonsense for private companies
* Other risks when exercising
* Liquidity
* Boom/bust cycles
* Lots of growing changes might get them to "have to let you go" and you get nothing to show for
Basically, you should talk to an experienced lawyer before taking any offer like this.
This seems like only the "first slide's" worth of what a tech employee needs to know about stock options, and not the most important things.
It's also worded imperfectly in parts, with the effect of being misleading.
If you start by looking at the lede and first paragraph, it's unclear who this is for, and seems more like a child's "book report", with no regard for the reader, nor sufficient understanding of the space that's relevant to the reader.
Perhaps this wasn't garbage in 2007, but I'm flagging it in 2025.
What happens to your options if the company goes public or gets acquired before you exercise?
What if you exercise but decide you want to sell but the company isn't public?
> When an employee exercises an option, the company must issue a new share of stock that can be publicly traded.
No. When you exercise, you get the stock, but it's definitely not guaranteed to be publicly traded.
For example Graphcore gave people options, which if exercised became stock in graphcore. If you then found a buyer and asked GC to approve the sale, they declined. Not public. Later they revalued that stock at zero.
To a better approximation, stock options work if you trust the company to pay out.
From looking at Wiki, the company is basically bankrupt with just $2.7m revenue for 450 employees. So their stock is literally worth nothing.
If they do get acquired by Softbank, employees will get a portion of the sale according to the amount of shares they own. The company valuation won't make any difference.
100%
[1] Stanford to continue legacy admissions and... https://news.ycombinator.com/item?id=44846130
They don't.