&quot;&gt; Tech employees need to wake up about common vs preferred shares&quot;<p>The important distinction is employee vs founder. You mention founders in your comment.<p>Founders typically would hold a double-digit percentage of common shares.<p>Employees that might get offered 0.1% if they are an early hire, or less assuming later stage (discounting exec hires here, because the OP of this thread was about engineers).<p>Founders also typically got their common shares at a very low valuation - let&#x27;s say they were issued pre-money, then their value to the tax man might be $200K (of a 2M pre-money valuation), but with a vesting schedule that makes them tax efficient.<p>Employees typically get their common shares at a higher valuation, post money, with a 200M valuation. Their 0.1% is also worth $200K to the tax man.<p>See how this is different?