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"The payoff at the end for the investors and the employees is a huge IPO."

That can be true for investors, but employees typically have to wait years to be able to cash out their shares.

If Groupon in the long term is the bomb the S1 indicates, an IPO is not a great deal for employees (unless they already got theirs in the G round, of course).

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why do you say years? wouldn't all the earliest employees be partially vested right now, and vesting more each month? and as long as the share price stays bubbly through the end of the lockup period they can cash out at/close to the top.

Every deal is different, but it's not unusual for vesting to take four years.

But it would be unusual for none of it to vest for four years. Typically a four year vesting means a 1 year cliff where nothing vests, at the end of which 25% vests. Then the rest vests at a rate of 1/36 each month.

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