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Hadlock posted:What is stock worth in a buyout?
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Oct 26, 2015 09:10
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RE: team member not being available much, maybe they're looking for another job? I know that now I'm changing jobs, I'm not as engaged as I used to be (not that I was all that engaged in the first place). Maybe they're already planning on leaving. That's also something I want to avoid at my next attempt at employment. I worked from home often (~1 day a week) prior to being "let go", and I think that was a symptom of my lack of engagement and interest. It's shot up to 2 and even 3 days a week these days, although last week was an outlier (we had a week-long hackathon). I'm still super disappointed, but I don't think I want to work with a manager that never had faith in me in the first place anyway.  What a mess. Next time, I'll be smarter and more assertive.
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Oct 26, 2015 11:39
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Hadlock posted:What is stock worth in a buyout? Reposting this spreadsheet I made for this exact question: https://docs.google.com/spreadsheets/d/1L-hwCRXKDwmOPqXCwQo4DM1cERYSgBIHM6Sp_Mye1Gc/edit?usp=sharing Save a copy to local account and you can put in your own numbers. For a private / startup company, you need to know what percentage your grant is versus total diluted shares. If they refuse to tell you the total diluted shares that's a pretty big red flag. The second two boxes you put in the exercise costs, and the "opportunity costs", i.e., what you're giving up for the total vesting period in extra salary, unvested stock, etc, to work at this company. The output is a grid of exit values at the top (what the company sells or IPOs for), and the dilution you'll experience from subsequent funding rounds. The grid cell tells you about how much your stock is worth in the scenario, and the color (red/green) is if that would be a "good deal" versus the opportunity costs. Note this is only for scenarios where the company has a liquidity event where common shareholders get paid out. Lots of startups fail outright or get acqui-hired with only preferred shares getting anything. There's a bunch of tooltip notes to hover over as well so look at those.
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Oct 26, 2015 12:31
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Also, if the company is public, then the calculations are pretty simple: Your options are set at X price, for whatever the stock is trading at the day/week you join. If the price then rises to Y, then your stock is worth (X-Y)*N-shares. If it drops below X, haha sucks to be you. For example, let's say you join the company and they give you 10,000 shares vesting over 4 years. The day you join the stock is worth $5. On your third year anniversary, the stock is trading at $9.50. You have 75% vested. Vest value (what you can exercise and take home today): (9.50 - 5)*7500 = $33,750 Unvested value (what you get if you stay and the stock doesn't move): (9.50 - 5) * 2500 = $11,250 If the stock price then drops to say, $3, then your options aren't worth anything. In that scenario, it's up to you if you want to say (standard is 10 years to exercise on option grants if you're still employed) or want to walk away.
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Oct 26, 2015 12:39
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Oh, the other thing to be aware of with private/startup companies: If things go REALLY, REALLY well for your stock, you can get into a sort of golden handcuffs situation with taxes. Let's say you company does awesome and your stock is worth $350,000 after 4 years of amazing growth and everyone loves you. Hooray, you're rich! Except, you're only "rich" on paper, in options on equity for a totally illiquid company. Plus, the when you exercise stock options, the IRS requires you to pay taxes on the "gain" from the exercise ($350,000) in this case. There are two types of options you get from a job: ISO and NQSO NQSO are the sort of cheaper options companies give out because of the accounting reasons. However, they have much harsher tax treatment, since you always owe tax on the gain as ordinary income. So for 350k, at a 30% rate, you'd owe $105,000 to the IRS the moment you pull the trigger. The good news is that for NQSO options you usually only get them with public, liquid companies, so you can just sell the stock right away to pay for the exercise and tax costs, meaning it costs you nothing out of pocket ("cashless exercise" is the term). Obviously for private startups, this isn't an option. ISO grants, however, have different tax treatment. These are usually what you get from private startups. For an ISO grant, you owe nothing when you exercise, and as long as you hold the stock for a year, when you do sell it you owe only the capital gains rate on the profit. So in a year you sell your stock for $400,000 profit, you pay $80,000, which you have since you just got a check for $400,000. HOWEVER, there is one very, very lovely catch. The AMT. The AMT calculations ignore the preferential tax treatment for ISO options and tax them just like NQSO options, meaning you need to cough up $80-100k in taxes, but you can't sell any of the stock to pay that tax bill. The AMT kicks in around the 250-300k gross income range, meaning you'll probably get hit if your options grant is big enough. So let's say your sitting on options worth 350k fully vested and you want to move on to something new. You have a few lovely choices - Exercise the options, pay a huge amount of money in tax and hope you can get that back one day when the company sells/goes public. - Stay at the company and don't exercise until they are going public/selling, so you can pay the tax bill. - Walk away from $350k - Find someone to loan you $100k collateralized with 350k in startup equity. For this reason, it's sometimes good to exercise your options as they vest, even if you don't want to leave, because if you do so before the 409a valuation is adjusted upwards, you can start the 1 year holding period right away, and avoid as much of the AMT as you can. The risk there, of course, if you might dump $5k into exercising and then lose it all if the company does tank.
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Oct 26, 2015 13:02
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Very few companies give out stock options now in favor of restricted stock units.
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Oct 26, 2015 17:45
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I gotta give props to AngelList, Stack Overflow Careers, Linked In and Indeed for being good resources re: job opportunities. I'm actually getting calls and messages from recruiters now! I've got a handful of in-person interviews under my belt already, and I've got at least two this week as well. Everything's coming up Milhouse 
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Oct 26, 2015 17:48
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pr0zac posted:Very few companies give out stock options now in favor of restricted stock units. This is entirely untrue. Most startups start out giving stock options, and shift to RSUs when the company's 409A valuation goes up enough that options become more and more worthless.
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Oct 26, 2015 18:45
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Someone care to give a primer on the difference and the reasons why companies choose one over the other? The option guide above by mrmcd is excellent.
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Oct 27, 2015 01:49
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Uh, so update They're going to put me over Software QA as 'lead QA engineer', and once I figure it out in about six months, I guess, put some people under me to create a department. So that's cool I guess. I'm working with the cool kids on the engineering team who seem to run the company, rather than the customer success team who live on the other side of the building with marketing and sales etc, so I'll be part of the process, rather than peripheral to it. They made that pretty clear early on. I have full access to the source code and will be making some small commits but I guess I'll just be big picture and finding systemic failures in the dev process, regression testing, etc? I want to stay out of dedicated software testing, I guess that's what the other hires under me would be for. They've known me for over a year and so they must have a lot of faith in me but it was ...interesting for them to be so open to getting me books and out to conferences to get me up to speed on the topic. I guess I'm one of the world experts on their software so I probably have a much better grasp of the topic than bringing in some college grad. It's been interesting. Stock and equity too I guess. Didn't have to ask for it. Hashing out the details on Friday. Also the team is full of geniuses, hooray! No lamers to worry about. Still trying to decide if I should live in SF or somewhere on the peninsula.
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Oct 27, 2015 07:15
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Hadlock posted:Uh, so update
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Oct 27, 2015 07:19
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Hadlock posted:Still trying to decide if I should live in SF or somewhere on the peninsula. If you like to go out to bars, eat good food, or drink Blue Bottle/Ritual/Sightglass coffee, and you bleed money, live in SF. If you hate fun or things to do outside after work, live in Palo Alto or below. If you want a reasonable commute and an affluent White-Asian monoculture live in the Burlingame / San Mateo area. Good food options, not too far from either PA or SF. If you want to live near the earlier stages of gentrification live in Berkeley or the nice parts of Oakland. Decent food options, If you hate driving ride live near the BART lines. If you hate driving and hate the lower-middle class live near a Caltrain station. Only slightly tongue in cheek. Caltrain gets really full during peak commute hours though.
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Oct 27, 2015 10:58
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What if I hate fun, driving, and the lower middle class all at the same time?
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Oct 27, 2015 11:43
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Live in the back of a truck in the company parking lot.
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Oct 27, 2015 13:02
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Tao Jones posted:What if I hate fun, driving, and the lower middle class all at the same time? Find an expensive apartment far from the Caltrain in South Bay and hail Ubers as if your life depended on it?
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Oct 27, 2015 17:11
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The position is near the Mountain View Caltrain station, so what you're saying is that as a single goon, not living in SF is social suicide? Slightly less than that one guy living in an RV at the Googolplex, but still pretty bad? The guys I talked to sounded like MV was pretty boring. One restaurant offered free swing dancing lessons near Castro Street but it seemed pretty dead by 9pm.
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Oct 27, 2015 18:08
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The sense I get from my friends who live there and visiting a few times is that SF is where you want to live if you want a "city life" kind of environment to live in, with walkability and bars and lots of things to do close by. Once you get outside SF into the wider bay area is turns into pretty typical boring suburban spawl with highways and strip malls and subdivisions. The problem is that SF is pretty small (just physically, but population wise too) by "iconic world city" standards, so you will pay through the nose plus the souls of all your unborn children to live there.
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Oct 27, 2015 18:22
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Hadlock posted:The position is near the Mountain View Caltrain station, so what you're saying is that as a single goon, not living in SF is social suicide? Slightly less than that one guy living in an RV at the Googolplex, but still pretty bad? The guys I talked to sounded like MV was pretty boring. One restaurant offered free swing dancing lessons near Castro Street but it seemed pretty dead by 9pm. edit: Wait, have you not actually visited the bay area yet? Because you should definitely visit these cities before making a decision on where to live.
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Oct 27, 2015 18:32
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Hadlock posted:The position is near the Mountain View Caltrain station, so what you're saying is that as a single goon, not living in SF is social suicide? Slightly less than that one guy living in an RV at the Googolplex, but still pretty bad? The guys I talked to sounded like MV was pretty boring. One restaurant offered free swing dancing lessons near Castro Street but it seemed pretty dead by 9pm. san jose and oakland are alternatives to san francisco if you want city living with slightly less crippling housing costs. everywhere in northern california is terrible though. if it's not too late consider looking for jobs in los angeles or seattle. slightly lower pay, infinitely better lifestyle
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Oct 27, 2015 18:59
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I spent a couple of days out there bumming around MV and SF, and observing the rest of the area via Caltrain. I have another trip scheduled out there to do some apartment shopping soon. I'm leaning towards SF proper as I already live in a somewhat young urban downtown area and I think I will be fine there, I just am overly cautious and want to make sure I'm making the right decision by soliciting feedback. Moving to the suburbs sounds less than ideal to me. Also I have designs on buying a sailboat and keeping it near downtown, so I would like easy access to it.
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Oct 27, 2015 19:16
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I hope you aren't planning on having any money left over after paying for your apartment and sailboat. Obvious solution is to just live on the boat.
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Oct 27, 2015 19:41
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Hadlock posted:Also I have designs on buying a sailboat and keeping it near downtown, so I would like easy access to it.
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Oct 27, 2015 19:48
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So let me run the numbers $125k salary $30k state and federal taxes $37k housing $24k fixed costs (utilities, food, gas) $12k savings Leaves $22k disposable income I have no outstanding debt. Which of those ballpark numbers sounds the most insane? Edit: obviously I'm going to finance the car ($8,000) and boat ($35,000) Hadlock fucked around with this message at 20:04 on Oct 27, 2015 |
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Oct 27, 2015 20:01
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He will be when his new company is acquired by Googazonsoft. Unfortunately, by then three commas will only get you a daily time share in a semi-private bathroom facility, but at least it's daily! Congrats on the new job Hadlock - just didn't think you were serious about sailboat money E: I'd guesstimate 42k in taxes, but I'm not familiar with Cali taxes except to assume they're high E2: oh, yeah I usually lump those in with taxes since that's actually what they are Munkeymon fucked around with this message at 20:59 on Oct 27, 2015 |
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Oct 27, 2015 20:03
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Federal tax calc came up with $22k and the Cali tax calc came up with $7k but I'm rounding up to $30k. I'm thinking I can write some of that off. I will probably want to talk to a financial planner to be sure though. Whoops I forgot about medicare and SS which knocks $9200 off the top and takes me down to $12,800 Hadlock fucked around with this message at 20:35 on Oct 27, 2015 |
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Oct 27, 2015 20:11
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Hadlock posted:So let me run the numbers
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Oct 27, 2015 20:39
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Plorkyeran posted:Obvious solution is to just live on the boat. Some tech workers actually do this. It's a viable, if weird, option.
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Oct 27, 2015 20:59
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My buddy did this in Houston on and off for a while. It frees up a lot of cash flow yeah. Boat slip is about $600/mo, plus insurance etc.
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Oct 27, 2015 21:02
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Doctor w-rw-rw- posted:Some tech workers actually do this. It's a viable, if weird, option. Yeah, I went out sailing in a friend's home a couple weeks back. He has a slip down in Alameda, uses a bike + ferry to get to work. e: worth a pic 
JawnV6 fucked around with this message at 21:28 on Oct 27, 2015 |
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Oct 27, 2015 21:07
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Hadlock posted:So let me run the numbers $37k for housing is only slightly over $3000 month, which is going to limit your options unless you live in neighborhoods that aren't near things or have a roommate.
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Oct 28, 2015 00:30
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ultrafilter posted:slightly over $3000 month, which is going to limit your options
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Oct 28, 2015 00:38
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I used to live in SF. I moved to NYC to save money.
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Oct 28, 2015 00:40
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Jesus Christ. I'm looking to put six figures in savings this year after tax and meanwhile I feel like I'm living like a king. Leave the drat Bay Area
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Oct 28, 2015 02:10
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Where do you live?
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Oct 28, 2015 02:17
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Yeah if the office wasn't in loving Mountain View, I would totally just live in Oakland for half the price and commute across to SF or something. I really, really like the sunset district by the park, but it's drat near 7 miles from the Caltrain station. For such a dense, global city, public transit there seems to be total garbage. I guess Apple has a campus shuttle pickup over in The Haight (hippy-ville) which works for Apple but if you don't work for Apple or Google you're kind of hosed if you don't live within 10 blocks of Market St.
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Oct 28, 2015 02:58
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A comprehensive map of human poop on San Francisco sidewalks
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Oct 28, 2015 03:25
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I had a new experience of watching a woman pee standing up for the first time last weekend in the subway station at ~22nd and Mission in SF. Girl wasn't even drunk or homeless, just really had to pee, and doing it in on the floor of the subway seemed like a good idea I guess? I've been in metro stations of probably 30 one million+ population cities in the last year, from cities Paris to Casablanca to Shanghai and Cartagena and never seen anything like that before.
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Oct 28, 2015 03:38
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Hadlock posted:I really, really like the sunset district by the park, but it's drat near 7 miles from the Caltrain station.
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Oct 28, 2015 03:38
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Hadlock posted:I had a new experience of watching a woman pee standing up for the first time last weekend in the subway station at ~22nd and Mission in SF. Girl wasn't even drunk or homeless, just really had to pee, and doing it in on the floor of the subway seemed like a good idea I guess? I've been in metro stations of probably 30 one million+ population cities in the last year, from cities Paris to Casablanca to Shanghai and Cartagena and never seen anything like that before.
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Oct 28, 2015 03:42
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Closest I've been to NYC in 17 years was Newark airport almost four years ago, I have no desire to go back (that is unless someone offers me a job out there and I can find a place for under $1900!) What do you guys think about these, general comments, etc. $2500/850 sq ft - http://sfbay.craigslist.org/sfc/apa/5268766803.html $2795/650 sq ft(?) - http://sfbay.craigslist.org/sfc/apa/5258619434.html Bad neighborhood, overpriced? Too close to freeway (noise) too far from public transit?
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Oct 28, 2015 03:51
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