Re:Do call yourself a programmer, and other career advice
by btilly on Friday July 12, 2013 @11:26PM
(#6036564)
The percentage that matters varies depending on the stage of the company.
For a non-public company, you have to pay the strike price, and you get stock with a particular estimated value. But you have no easy way to convert that stock into money. This is worthwhile or not depending on the ratio between price and strike price, and depending on whether the eventual price matches the current estimate.
But if the company goes public, then the equation changes entirely. Now you can take out a short term loan for stock, buy at the strike price, sell at the market price, pay off the loan, and pocket the difference. Now you really should think of it as profit/option * # of options.
The longer that you intend to stay, the better your odds are that the second way of thinking about it is right, and the more valuable your options are likely to wind up being for you.
For a non-public company, you have to pay the strike price, and you get stock with a particular estimated value. But you have no easy way to convert that stock into money. This is worthwhile or not depending on the ratio between price and strike price, and depending on whether the eventual price matches the current estimate.
But if the company goes public, then the equation changes entirely. Now you can take out a short term loan for stock, buy at the strike price, sell at the market price, pay off the loan, and pocket the difference. Now you really should think of it as profit/option * # of options.
The longer that you intend to stay, the better your odds are that the second way of thinking about it is right, and the more valuable your options are likely to wind up being for you.