> 1st time I was naive didn't get all the details and ended up getting screwed
What details is one meant to know?
What details is one meant to know?
+ who gets diluted
+ vesting schedule
+ does vesting accelerate with an acquisition?
+ liquidation preferences
+ how large is the employee option pool
+ what happens to your holding on a down-round or restructure (this is hard not to get screwed on if this is the intention)
+ not checking that the options agreement has been signed by the company
+ not signing an options agreement and taking the company and/or founder at their word that you have stock
founders usually give themselves a sweet deal. ask to see their agreement and compare it to yours.
while you are at it, check the structure of the board and if the board are able to block an acquisition. you may be working for a company who can't exit unless the investors get at least 4-5x, and if they don't, you get nothing
there are probably some things that I am missing, which is why it is worth paying a lawyer for 3-4 hours of time to go over it (not the company lawyer - see 'the social network')
PS: The law is on your side, as an employee lost pay is paid out before any other creditor but you need to list actual salary in $ and not just shares. You also can have issues with taxes so be careful.
I have not heard of cases where shares were vested then lost outright, except for perhaps Eduardo Saverin of Facebook. There are other (quite common) cases where the exit is not at a sufficiently high valuation compared to the most recent investment round and preferred shares cash out while common shares are reduced to little or no value.
The key thing to know is that not all stock is the same. "Owning" 1% of the company doesn't mean you get 1% of the exit necessarily.
In smaller exits those liquidation preferences can mean that the investors are paid out and nothing is left of the pie for you.
A good article on this:
http://web.mit.edu/e-club/hadzima/what-are-the-terms-part1.h...