matuszeg
Joined 10 years ago
Joined 10 years ago
That same company eventually raised a sizeable equity round and then began issuing options for new employees. If they were to continue issuing equity grants, the cost to purchase the grant would be much more than $200 (likely tens or hundreds of thousands of dollars). Alternatively, if the company were to give employees equity grants directly instead of having to buy them then that would count as income and the employees would owe taxes on the equity gained. The tax bill could also easily be tens or hundreds of thousands of dollars.
Options avoid all of that and defer the upfront costs that come with an equity grant.
Imo, the real problem is that options can be clawed back once you no longer work for the company.
Uber eliminated that problem. It would be terrible to go back to that system where drivers can just refuse you based on where you are going or what you look like.