Compensation Data Links - Stock Option Counsel, P.C. - Winter 2023 Newsletter - Mailchimp
Attorney Mary Russell counsels individuals on startup equity, including:
You are welcome to contact her at (650) 326-3412 or at info@stockoptioncounsel.com.
Mailchimp version available here.
Hello Startup Community,
Happy Valentine's Day! 💙 Here's the latest on startup equity.
Compensation Data. Here’s some recent posts on startup employee compensation data:
Betts Recruiting recently published an Executive Compensation Guide with market data for cash compensation for many C-suite and VP roles at startups by company stage. They also have an Equity Guide with market data for equity and cash offers for all levels on the sales team.
Matt Schulman of Pave recently posted a blog on Medium titled How much comp should the first engineer at a venture backed startup get — cash, equity, and title?
Individuals often struggle to find good resources since subscriptions to the primary startup compensation data sources are only available on the company side. I'll continue to share publicly-available resources that readers share with me.
Carta’s Employee Tax Advisory. I’m delighted to add Carta’s employee tax advisory service to the blog’s list of company educational offerings. Carta's taken it to another level by launching this add-on to their company cap table management software to allow companies to provide individualized tax advice to their employees.
Employees of subscribing companies have access to one-on-ones with tax advisors such as:
Ask a Quick Question (15 minutes)
Understand Equity Tax Basics (30 minutes)
Create Tax Scenarios (45 minutes)
Discuss Tender Offer Participation (30 minutes)
I’d love to hear feedback from readers who have used this service!
The Myth of Startup Equity. Ann Hodge and Peter Walker of Carta recently published the fascinating 2022 Employee Stock Options Report noting that “nearly half of in-the-money options that expired in 2022 were left unexercised.”
This is a great time to revisit The Myth of Startup Employee Equity. Here's the myth:
If you have any startup equity, and the company is a success, you will be rich!
All startup equity contracts are “boilerplate,” so whatever fine print you sign, you will be rich!
You never have to make an investment in or pay taxes on startup equity until you are already rich!
The duller reality of employee equity conflicts with this myth. Here’s my take on this “reality”:
The number of shares in the original job offer will determine whether the potential upside will balance the financial risk in joining a startup.
The fine print terms affect the potential value of any startup equity offer (especially the consequences of a termination of employment prior to a company exit event).
Standard exercise terms for employee options often require individuals to choose between forfeiting vested stock options and making a significant personal investment in the shares (to cover the exercise price and associated taxes) prior to having access to liquidity for the shares.
Please read more and comment on the blog.
Stock Option Counsel, P.C. - Legal Services for Individuals. Thank you for your enthusiasm for my practice and the blog. Please keep in touch!
Best,
Mary
Mary Russell | Attorney and Founder
Stock Option Counsel, P.C. | Legal Services for Individuals
(650) 326-3412 | mary@stockoptioncounsel.com
