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Comment by 3gjg3j3g3h3h3 | Hacker News Reader

Stack Overflow prohibited employees from selling shares privately, while also setting an expiry date on the options that has forced some of the company's longest-serving employees to choose between surrendering their equity, or paying a ton to exercise options that they may never be able to sell.

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Startup options have been like this forever. Maybe you could theoretically sell, but no one did, and marketplaces like Forge and Equityzen didn't exist.

Startups used to IPO or fail much faster

The time from founding to IPO is a stat that is widely misrepresented by well-educated people who may not have had the time to check the numbers.

See for instance the graph Company Age (Years) shared by Meritech. There are 8 companies in the cohort that are 20+ years, only 1 (Salesforce) that IPOed with less than 10 years. In fact, from the entire comps (20+ public SaaS), only Salesforce IPOed at year 5.

https://www.meritechcapital.com/public-comparables/enterpris...

Looked at the graph you're referring to.

This looks like it's a very narrow set of companies. We should be looking back farther, and wider. Recall that, for example, Netscape IPO'ed after 18 months and Amazon IPO'ed after 3 years. For better or for worse, 90's companies generally IPO'ed much quicker than the SaaS cohorts mentioned in the data you linked to. Back then, 10+ year timespans until IPO were rare.

Well, that's the point. 2020 is not 1990-2000. Time to IPO has increased dramatically.

The graph shows 50 companies (they don't do a good job at scaling the site, but the data is there).

Netscale and Amazon are only anecdotes and pure exceptions of the dot.com era. The set of companies that went burst during this period because of bad management is composed of at least 15 publicly traded companies. If your compensation included shares of any of these quick IPOs (AOL, Yahoo, pets.com, Global Crossing, etc.) your shares would have ultimately be zero as well (compounding interest is what makes you wealthy with these long-term horizon packages and you wouldn't have sold all your shares at ipo).

Yes those 50 companies are very recent in SV history. Hence we need to look back farther to see the change, because our standards were set many decades ago.

And whether a company goes bust post IPO isn't really the issue here since liquidity is what we're discussing.

Yeah, that’s literally where the 4 year cliff came from. If you joined on day 1 and stayed the whole 4 years, you could expect to make something off the equity. Alternatively, the company would go under before year 4, and you’d be free to move on.

Can confirm. Exercised some with a large tax hit, based on some hand wavy assertions about liquidity in the future. Now I'm stuck with it, with no liquidity in sight. And I'm sure it's been significantly diluted by this point.

Live and learn I guess.

SO also pays pretty shit so that sounds like a super bitter pill to swallow.

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