Lecture 15: How to Manage

Re:Lecture 15: How to Manage by rdlecler1 on Tuesday November 11, 2014 @08:36PM (#8593514)

On vested shares: (1) A company needs to be upfront with this and explain the risks (2) If a company was upfront, then maybe a potential employee starts asking for more equity or more salary, which leads to more dilution because the company has to issue more equity or raise more capital. I don't think, and I hope that, Ben doesn't think that a company should trick their employees with this.

So maybe the ultimate solution is to give a 10 year option for 75% of their shares and 25% must be vested within 90 days. This gives some additional incentive for those that stick around without totally screwing someone who bled for you.

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Re:Lecture 15: How to Manage by Iftheshoefits on Tuesday November 11, 2014 @09:04PM (#8593591)

From my point of view, these vesting schemes all seem to assume the employee is a dishonest actor and to place a huge discount against the fact that the employee is risking much more than a typical big-corp employee, for a much smaller chance at a very thin sliver of what amounts to a lottery-ticket-probability acquisition/IPO.

A more equitable scheme would require a company to provide cash compensation "back pay"/"bonus" that brings the employee's compensation up to his would-have-been-market rate if the company terminates the relationship prior to the initial vesting. This protects the company and the employee: the company's shares are safe and the employee has a slight cushion in the form of a lump sum payment if he's cliffed.

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