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Comment by rahimnathwani | Hacker News Reader

Brex has been around for a long time, so employees will have been issued stock options with vastly different exercise prices.

Early employees' options will have value, but more recent options are likely underwater.

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I strongly suspect they shifted to RSUs at those valuations.

It seems unlikely that regular employees would be issued RSUs. Tax is due at vest, and you can't liquidate to fund the tax bill.

The usual move here is "double trigger" RSUs that don't vest until a liquidity event, thus no taxes due until said liquidity event.

Are those common for regular employees?

highly common

Right. Plus often the tax is paid out of RSUs given, you just get less in RSUs, some is subtracted to pay tax.

There's double trigger RSUs and so on that allow you to have reasonable tax treatment, due to the theoretical threat of loss if liquidity isn't available. I worked at a company that had this at least while I was there.

I was a regular SDE at brex for a couple years and my various documents about comp say I have RSUs, and carta says so as well.

I've never bothered to understand the details since none of the private companies I've worked for have had the non-cash portion of their comp be worth anything but $0 before.

Nope, you as a company owner are highly motivated to shift to RSUs once you hit a certain valuation and number of employees. Everyone does it.

Can you expand on why at a certain valuation and size you would shift?

options can only last 7 years, but brex was founded in 2017.

When the options expire do they give new equivalent ones to the employees that hung on? Otherwise what’s the point?

You can exercise the options before that time is up, paying the strike price to convert them to shares

But then you’re potentially stuck with worthless options you can never trade, right? Seems very unfriendly to employees

> Seems very unfriendly to employees

Ding ding ding ding ding!

Most ICs figure this out sooner or later. Unfortunately many only discover it after being screwed hard financially.

You have to exercise the options or let them expire. You normally have 10 years not 7, but if a company comes up on 10 years after they issued their first options, they might try a tender offer to buy some employee shares. If your 10 year old "start up" shares can't be sold anywhere, then they probably aren't worth exercising. A company that can't provide liquidity to employees for 10 years will probably never do it.

Who says options can only last 7 years?

ISO options have to expire within 10 years of when they are granted. Sometimes companies make them expire earlier than that, so OP might be thinking of options they were granted. E.g. I once had options that expired 30 days after ending employment even thought the ISO requirement is up to 90 days.

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