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Comment by beervirus | Hacker News Reader

The post is from April.

...in (2017) before leaving GitLab.

Tomorrow on the 14th of October 2021, GitLab is going to the public markets and will be priced around $60 - $66 a share. So this person threw away his $1m worth of stock options because of GitLab's culture.

Oh dear.

That's easy to say in hindsight, but most startups fail.

Ehhh but... $4,000 to exercise the shares? You have to be REALLY REALLY confident a startup is going to 100% no-soft-exit fail to not take that bet, given the vastly positive payout even an acquihire exit would give, given how cheap that strike price is.

$4,000 to exercise and $250,000 in taxes on shares that they wouldn't be able to sell for another four years. The AMT heavily punishes exercising options in pre-IPO companies.

In 2017 when making this choice, presumably the FMV would not have been anything close to what it is now, and there's little to no issue with AMT.

$4000 to exercise, but a lot more in taxes. Given that his shares were worth about 1/6 of what they are now, and assuming the FMV for tax purposes was about 1/3 that, he would have to pay income tax on $60k worth of paper gains. That's an additional 20-30k depending on the state.

Most startups aren't valued at $1.5 billion, which GitLab was at the time this article was written. Once a startup reaches that valuation, it's already been mostly de-risked.

Not hard to make that at a FAANG org with RSUs in 4 years. If they had vested the entire amount that would be have been a decent exit.

_sigh_

Any way you slice it it's a million dollars.

4 times your annual salary in one lump payment is a life-changing sum of money for most people.

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