Ask HN: Is it just me or do a lot of people not know how stock options work?

90 points

10 years ago

I work in a startup in San Francisco. We're profitable & growing, about 30 people now. I'm one of the first engineers so I have a good chunk of stock options.

A lot of times when I talk to my friends (mostly engineers, mostly in their middle 20s) about stock options they don't even know the basics.

A few examples from my life:

* A coworker left the company right before the end of his first year. He had ISOs, and it wouldn't be that expensive to buy them, but he still decided to leave right before the 1 year cliff date to go work in another company.

* A friend of mine did not sign his stock options paperwork when his employer gave it to him more than 1 year ago. I guess he was just lazy, didn't want to sign something he did not fully understand. I don't know all the details but I assume if he signs it now he loses 1 year of vesting, the grant price will be higher — just not the greatest decision / attitude imo.

* Another friend left the company where she had stock options, 6 months later she found out that the company was sold. She remembered about the stock options and asked me for advice. She did not know much about the topic so I told her roughly what her options were, told her about the 90-day rule. I later found out that she ended up getting some money from her past employer.

I know that there's a conversation [1][2] about changing some of the technicalities around stock options, but I think there might be an even bigger problem — many employees don't understand the basics of stock options, hence they don't value equity as much as employers / investors do.