TIL it's actually 2000 shareholders as of 2012. https://www.investopedia.com/terms/5/500-shareholder-thresho...

Also, the taxes for RSUs doesn't work. Say the pre-IPO stock is worth $3 right now, and a good exit is $10. I'll need cash to pay taxes on those RSUs as they vest. Their current market value should greatly exceed my salary as IPO approaches, but even at $3, the taxes on the RSUs are likely to be 25-50% of my post tax cash income. With 33% effective tax on the income, paying another 50% tax for the RSU vest means my effective tax rate would he 66%. Compensating for by increasing salary would increase the company run rate, and would bump many employees into the 51% tax bracket, so their marginal rate would be something like 75%.

I think options will trigger this as well, this is where the “double trigger” rsu came from.

As in, if a company as 500 (now 2000 I think) options-holders, the SEC will start regulating them as if they're public? I don't think that's true?

Double-trigger RSUs are AFAIK just a way to avoid paying taxes on illiquid assets. The reason to shift from options to RSUs at all is (I think) that once the company's FMV gets high enough, the strike price and taxes due for the options will be so high that employees won't be able to afford paying them if they leave the company.

No but companies don’t want to risk that 2k of the options holders might exercise and force the issue so it’s functionally the same.

I thought it was common knowledge that fb started the double trigger thing to avoid this limit, and I heard something similar when a startup I was in converted options to RSUs.