Information asymmetry

Really cool to see this tweet today from Naval Ravikant of AngelList, encouraging startup employees and prospective employees who are offered stock options to ask questions.

To get at the information needed to assess the potential value of those options, Naval says, in a companion tweet to the one pictured: "Ask about Liquidation Preference, Exercise Price & Terms, Fully Diluted Shares & Company Repurchase Right[.]"

6a01156e3d83cb970c01901dc8b8fe970b-580wiTo that list, I would add, ask also about whether the company has a management incentive, or carveout, plan in place. These plans are often set up when the common stock of a company is under water.

And here's an earlier post I've written on the subject, Being Equitable with Employee Equity. It has an 8 point checklist that is similar to Naval's.

And here's a recent post from Joe Wallin wrote about what to do when getting ready to exercise a stock option.


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