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Arsenic Lupin posted:I think you were right, I was confusing the perils of options with the perils of RSUs. Buy options for $.07 when you join the company, get imputed income when the options vest at IPO, stock falls before you can sell it (within the restricted period). Fun fun. I still don't think this is correct. You should only get imputed income when your options become fully vested (i.e., when they are no longer restricted), and if you go from $.07 options to IPO with no early exercise you should fire your tax professional into the sun. Almost all of the horror stories of employee equity come from 1) options and 2) early exercise. The flip side is that early exercise theoretically provides a way to significantly lower your tax liability relative to RSUs (where you are going to get hit by a huge AMT bill as soon as the post-IPO lockout period ends, with no real way to reduce it); it allows you to spread out your income more evenly, which is beneficial given how marginal taxation and/or AMT work, and the second is that it allows you to potentially transfer some of your equity appreciation away from taxable income at your marginal tax rate, into long-term capital gains at a significantly lower rate.
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Feb 8, 2016 04:52
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One "buys" after the options vest. The thing that happens when someone joins the company is the company striking the price.
Gazpacho fucked around with this message at 06:25 on Feb 8, 2016 |
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Feb 8, 2016 04:57
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Gazpacho posted:I hope the current crop of online "do my chores so I can bask in bourgeois awesomeness" companies all get screwed. Read that as "Hang Selves" at first
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Feb 8, 2016 05:04
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I'm going to stop talking about taxes because I am way wrong.
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Feb 8, 2016 05:10
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Gazpacho posted:I hope the current crop of online "do my chores so I can bask in bourgeois awesomeness" companies all get screwed. Cripes, I didn't know this was a thing. I hate everything.
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Feb 8, 2016 07:14
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Gazpacho posted:I hope the current crop of online "do my chores so I can bask in bourgeois awesomeness" companies all get screwed. Just buy your friends a case of beer and have them hang the shelves. Jesus.
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Feb 8, 2016 14:13
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What if you don't have friends though?
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Feb 8, 2016 14:38
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mobby_6kl posted:What if you don't have friends though? The beer should handle that.
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Feb 8, 2016 14:39
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mobby_6kl posted:What if you don't have friends though? sounds like a business opportunity, you should develop an app where you can pay plebs to be your friend
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Feb 8, 2016 19:33
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Pellisworth posted:sounds like a business opportunity, you should develop an app where you can pay plebs to be your friend Beerr.
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Feb 8, 2016 19:45
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Why are (some) tech companies called unicorns? I don't get it
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Feb 8, 2016 22:03
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DOOP posted:Why are (some) tech companies called unicorns? I don't get it Heavily associated with virgins.
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Feb 8, 2016 22:10
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DOOP posted:Why are (some) tech companies called unicorns? I don't get it Startups that are worth >= $1 billion. I don't know why -- because they're rare, maybe?
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Feb 8, 2016 22:11
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DOOP posted:Why are (some) tech companies called unicorns? I don't get it
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Feb 8, 2016 22:16
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It was initially coined to refer to how venture capitalists were chasing after the startup company which would be worth a lot of money. Because there are thousands of startups that flame out or just end up being mildly successful niche businesses finding and investing in the company that was the one to actually hit $1B in valuation was a near mythical event and was compared to catching a unicorn. The term "unicorn" just stuck stuck. A better term would be something like "winning the lottery", "beating the odds", or "hitting the jackpot" but VCs don't exactly like to admit that their business model sometimes strongly resembles gambling. The fact that there are so many unicorns running around is more an indication of how freely the cash is flowing than the quality of the businesses. There is a lot of money out there chasing any sort of return.
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Feb 8, 2016 22:23
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Yeah the idea with VC seems to be that you're buying lottery tickets and if you lose or barely break even on 19 out of 20, it's fine because that twentieth one was Facebook. e: Was VC involved with the rise of Google, Twitter, Facebook etc. at all?
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Feb 8, 2016 22:25
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Venture capital is Las Vegas for billionaire compulsive gamblers.
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Feb 8, 2016 22:27
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Absurd Alhazred posted:Beerr. Thanks for the ideas, I think I'm gonna call it Adult Friend Finder or something like that, to make it clearer what it does.
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Feb 8, 2016 22:29
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Nessus posted:Yeah the idea with VC seems to be that you're buying lottery tickets and if you lose or barely break even on 19 out of 20, it's fine because that twentieth one was Facebook. Absolutely. You have to get seed money somewhere. When you're ready to move out of the garage and start expanding, you need a lot of capital. You can't grow a company on three guys and a couple of servers.
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Feb 8, 2016 22:29
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Shifty Pony posted:It was initially coined to refer to how venture capitalists were chasing after the startup company which would be worth a lot of money. Because there are thousands of startups that flame out or just end up being mildly successful niche businesses finding and investing in the company that was the one to actually hit $1B in valuation was a near mythical event and was compared to catching a unicorn. The term "unicorn" just stuck stuck. This checks out. Thx namesake posted:Heavily associated with virgins. Lol
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Feb 8, 2016 22:41
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Shifty Pony posted:It was initially coined to refer to how venture capitalists were chasing after the startup company which would be worth a lot of money. Because there are thousands of startups that flame out or just end up being mildly successful niche businesses finding and investing in the company that was the one to actually hit $1B in valuation was a near mythical event and was compared to catching a unicorn. The term "unicorn" just stuck stuck. no, the market is full of rational actors, who use accurate and complete information to inform their investment strategy, you see~ I met an econ guy at my uni who kept going on about his dream to become a venture capitalist, and he at least was honest about thinking that being a professional gambler would be an awesome job as long as you're winning and that winning would give him a better high than drugs.
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Feb 8, 2016 22:49
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I CANNOT EJACULATE WITHOUT SEEING NATIVE AMERICANS BRUTALISED!
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blowfish posted:no, the market is full of rational actors, who use accurate and complete information to inform their investment strategy, you see~ VCs are often gambling with other people's money so there isn't much downside to losing.
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Feb 8, 2016 23:02
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Also it is really really important to know/remember that the value of many of these companies have been artificially goosed over the $1 Billion mark because they (the founders and the investors) want to say the company is a unicorn. Most of the late round funding has conditions and ratchets which basically make the headline number being trotted around meaningless. For example a VC might invest $100M for 10% of a company, which makes the company worth $1B. That's the number the press talks about. What they don't talk about (because it is done via confidential contracts) is that the 10% is only true if the company keeps going up Up UP! If that doesn't happen the investor gets to lay claim to more shares at a reduced price so that their original investment is made whole. So if the company IPOs at a valuation of $750M (making the initial investment worth $75M) the VC might be able to buy an additional 10% of the company for $50M... making their total ownership 20% at $150M and they didn't lose a penny. Employees on the other hand who bought shares at a time when they thought and were being told by the founders that the company was worth a billion dollars are screwed - this is kind of what happened to Square employees.
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Feb 8, 2016 23:37
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that's 
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Feb 8, 2016 23:40
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I hope this leads to the utter collapse of the sharing economy
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Feb 8, 2016 23:46
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Scrub-Niggurath posted:I hope this leads to the utter collapse of the sharing economy it's not sharing if you don't make money off it... ...uhhh... ...actually that would mean most tech companies do sharing
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Feb 9, 2016 00:00
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Scrub-Niggurath posted:I hope this leads to the utter collapse of the sharing economy
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Feb 9, 2016 00:09
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FlamingLiberal posted:I wish people would stop calling it that since it's more the "LALALALA I'M NOT BREAKING THE LAW IF I CAN'T HEAR YOU" Economy This, EXACTLY. Who knew -- it's way cheaper to run hotels or taxis or personal services if you don't have to get a license, post bonds, and obey the standard laws on the subject, including paying specialized taxes. The CEOs (especially Uber's ) say "transformative" but in practice it means "I don't have to follow taxi regulations because I'm not a taxi enjoy your lack of liability insurance, training, and background screening." See also the various AirBNB horror stories, from both hosts and guests, as well as the apartment buildings being turned into AirBNB farms, every apartment on short-term rent but again not having to obey hotel ordinances. The businesses that do obey local laws are at a severe disadvantage against the "disruptive" businesses that claim they don't have to.
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Feb 9, 2016 01:12
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Arsenic Lupin posted:This, EXACTLY. Who knew -- it's way cheaper to run hotels or taxis or personal services if you don't have to get a license, post bonds, and obey the standard laws on the subject, including paying specialized taxes. The CEOs (especially Uber's ) say "transformative" but in practice it means "I don't have to follow taxi regulations because I'm not a taxi enjoy your lack of liability insurance, training, and background screening." See also the various AirBNB horror stories, from both hosts and guests, as well as the apartment buildings being turned into AirBNB farms, every apartment on short-term rent but again not having to obey hotel ordinances. I went to a presentation for a startup called Truxx, which is basically Uber for moving things. One of the questions from the audience was "what are you going to do when established businesses complain about regulations you might be violating", and the response was that there's nothing relevant yet or something. Sure, buddy, the Teamsters absolutely will not care about you taking over hired freight on the DL. 
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Feb 9, 2016 02:18
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Strength: Make money really fast hiring cheaper drivers. Weakness: Your kneecaps when the Teamsters are done with you. Opportunities: Healr, Uber but for ambulances. Threats: Massive lawsuits.
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Feb 9, 2016 02:29
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Just don't take my car2go away. /sweats
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Feb 9, 2016 02:31
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Stanos posted:Strength: Make money really fast hiring cheaper drivers. That's why you use Mobr, like Uber but for organized crime. Order hits on your iPhone! One-Click-Protection-Racket!
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Feb 9, 2016 02:36
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Absurd Alhazred posted:I went to a presentation for a startup called Truxx, which is basically Uber for moving things. One of the questions from the audience was "what are you going to do when established businesses complain about regulations you might be violating", and the response was that there's nothing relevant yet or something. Jesus christ, this is actually real.
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Feb 9, 2016 02:38
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The really frustrating (and dangerous) thing about the current bubble is unlike the last one these are for the most part private companies who can conceal things until it is too late. Ignoring the giant elephant in the room of Uber, if something like Stripe, WeWork, or even AirBNB were to run out of runway it could potentially impact a whole bunch of people financially. As for the tread topic as to which unicorn is going to die first? I vote Theranos. After a riding the promise of being able to diagnose everything with a single drop of blood to a $10B valuation they have been nose-down and accelerating since October when the Wall Street Journal published an article which basically said their tech is inaccurate bullshit that doesn't work.
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Feb 9, 2016 02:46
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Zenefits CEO stepped down today after allegations they were using unlicensed brokers to sell insurance
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Feb 9, 2016 04:00
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Paypal's CTO stepped down today after disappointing performance.
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Feb 9, 2016 04:01
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Yelp's CFO stepped down today after a failure to increase revenues to keep pace with increasing expenses.
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Feb 9, 2016 04:02
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Well, that's certainly an unrelated conglomeration of things there, each an individual snowflake that will never merge into a snowball of DOOM. Yahoo Q4 report comes out tomorrow after the close of the stock market! e: From the Zenefits announcement: quote:Our culture and tone have been inappropriate for a highly regulated company. Zenefits’ company values were forged at a time when the emphasis was on discovering a new market, and the company did that brilliantly. Now we have moved into a new phase of delivering at scale and needing to win the trust of customers, regulators, and other stakeholders. ee: Good overview of the 2015 unicorns. Uber is "worth" $51B. Arsenic Lupin fucked around with this message at 04:21 on Feb 9, 2016 |
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Feb 9, 2016 04:08
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Shifty Pony posted:It was initially coined to refer to how venture capitalists were chasing after the startup company which would be worth a lot of money. Because there are thousands of startups that flame out or just end up being mildly successful niche businesses finding and investing in the company that was the one to actually hit $1B in valuation was a near mythical event and was compared to catching a unicorn. The term "unicorn" just stuck stuck. Term was coined in 2013 and is now obsolete http://techcrunch.com/2013/11/02/welcome-to-the-unicorn-club/ I still think Theranos will be the first dead one. They're more in breach of regulations than anyone else, including Zenefits (at least the now-former CEO had the stones to admit his massive cockup, though he probably didn't get a choice).
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Feb 9, 2016 04:54
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Theranos is looking like it will probably become a fraud case, not just a collapse.
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Feb 9, 2016 05:12
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