A tongue in cheek question, brief discussion and an awesome informational guide for this week’s What I would have said…
When is exercising the WRONG decision?
(Let me direct first: I am NOT advocating for a lack of physical exercise or mental exercise. It is an essential tool in the belt for everyone. I am not talking about ditching your Peloton Bike...I consider myself a rower but goodness gracious those beasts are expensive)
What I am positing however is a difficult question/decision many employees of early stage startups face: is your company going to survive this challenging time and whether to exercise your options
See what I did there?…No?…I’ll continue with my weak attempt at pre- Dad humor with a matter of fact statement
“Being an early stage employee is really, really difficult..especially now”
Startups fold the vast majority of the time ( 97%) and now in a time of great uncertainty with #covid19 changing how just about every vertical operates, liquidity will remain king.
Sadly, you’ve seen a great number of high profile startups WITH cash cut costs…
But why? Let’s face it, startups face the daunting challenge of surviving 2020/2021 while trying NOT to dilute any future earning potential for their employees and investors.
That is threading the needle with zero guarantee for tomorrow
And with many people needing cash soon, startup employees will face a decision of
‘letting it ride’, cashing earned options/stock or expending their hard earned cash…what.to.do?
I wish I had the answer to every specific question but in this instance, SecFi has done an amazing job of building this easy to digest guide for startups to learn how equity is priced, carved, accrued and you got it, #exercised.
From a leadership perspective there are noted decisions from awesome companies like #salesforce are increasing internal equity(RSU’s) and CEO’s cutting their salary to zero (including us).
Since the name of the game shifts to retention, it is never been a harder time to make a decision as a startup employee with options…to exercise or to not, tis the question?
ES