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Comment by rainyMammoth | Hacker News Reader

I had a similar comical situation with Uber a couple months ago.

I was arguing that the offer they gave me was a paycut compared to my current position. The recruiter explained to me that I should value the stocks not on the latest valuation but on the 100% certain 250B$ valuation on IPO day.

Unfortunately recruiters get a bonus when you sign and are not accountable for anything down the line. They have all the incentives to lie to get a candidate to sign.

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> I should value the stocks

I only accept sign on bonuses, keep your stock, it's worth a lot... right?

I had a similar (ridiculous) conversation with a startup that had already listed on the public stock exchange.

Okay, if the shares are really worth much more than their current market value, and you want to hire me for $X salary and $X/50 market value worth of your stock, it'd make more sense for me to take a different job that just pays $2X salary in cash, and then buy stock on the market...

I joined my current employer a couple days pre-IPO, was given stock options and told they might be worth a lot. Despite my insistence, I wasn't told the exercise price, nor how many shares were outstanding, nor any other relevant information, so (sensibly?) valued the options at around zero. They turned out to be worth more than my base salary.

Good for you but this is still extremely shady. Any respectable company should tell you how much you are getting and how those are currently being valued. Attaching no value to a private company RSU is pretty smart though.

Anecdotally, I was a bit sad that I didn't get past the first round with Uber, but then a few days later they announced their hiring freeze and terrible financial performance... probably for the better!

Are employees even able to sell on IPO day?

In a traditional IPO, there is generally a 90-180 day lockup period for existing shareholders (to prevent shares from flooding the market on day 1). This is one of the big benefits of a direct listing (see Spotify/Slack)...any shareholder can sell stock on day one.

> to prevent shares from flooding the market on day 1

These are common, but I don't think they apply to all share classes, so the big boys are free to get their money out.

usually it doesn't apply to the "Big" VCs and founders. So they are quietly able to get out before the stock crashes a couple months later.

Could you share some examples of that occurring? To my knowledge, a lockup period is almost always a standard requirement from the underwriter (on any larger IPO), and in some states is even required as part of their Blue Sky Laws.

If a founder/VC wants to get out before the IPO, they usually just do so on the secondary market. Example: Benchmark cashing out a portion of their Uber stake to SoftBank pre-IPO.

https://www.sec.gov/fast-answers/answerslockuphtm.html

I think Ubers lockup expires November 6th. should be an interesting day to watch that stock.

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