A Guide to Employee Equity
Hi, thanks for the lucid interview. Why the 3 year minimum service period to extend the exercise window?<p><i>&gt; The main point is that if someone decides to not exercise and&#x2F;or is not able to exercise and they leave the company, their options typically have a three-month expiration. So, unless the person exercises them within three months after leaving, they lose those options, which is kind of crazy to think about because the person has already invested time, already contributed to the company, already meaningfully helped the business.</i><p><i>&gt; So at Gusto... everyone that has stayed here at least three years, their expiration changes from three months to ten years.</i><p>Doesn&#x27;t everything just said about it being &quot;crazy&quot; to lose your options apply if you leave at 2.5 years? You&#x27;ve &quot;already invested time, already contributed...&quot; Why should you lose vested options, ever?<p>I asked Adam D&#x27;Angelo about minimum service periods and he responded that it&#x27;d be more transparent to have a longer cliff. My perspective is that backloaded vesting would be closer to the probable intended effect here (a barrier to leaving early, but you don&#x27;t lose everything).<p>Put another way... Aren&#x27;t &quot;minimum service periods&quot; exploiting opaqueness to make them seem like friendlier terms than longer cliffs or backloaded vesting?