Do the math on your stock options
Options are for suckers.<p>Do you want to be an investor? No? then why would you pay for stock out of your own money?<p>At our startup everyone gets the same stock, not options, through our Equity Incentive Plan. Here's how it works.<p>1. We lend new employees the amount of money it would take to buy common stock on a non-recourse promissory note the collateral in this case is the stock itself.<p>2. The employee then buys the shares from the company with the loan.<p>3. The employee then files an 83b election so that when it comes time to cash out, they only pay taxes at the strike price of when the shares were bought.<p>4. At a liquidity event, the promissory note goes away and they own the shares outright<p>5. They only pay taxes when they sell their shares not when they buy them<p>Now there are other provisions like if they want to sell prior to a liquidity event, we get rights to buy them back first if we choose to - in which case we just write off whatever the unvested portion from the note and take those shares back.<p>In the end it gives the employee actual rights to the same class of stock as the founders, so we can't fudge our employees out of stock benefits without hurting our own shares. This also prevents them for having to lay out any money until there is an actual no kidding liquidity event, so they take no risk of paying taxes on something which might be worthless. Even then they will only ever have to pay taxes on the shares, the promissory note goes away, so in effect looks like a equity grant at the time of sale.