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From the Northeastern Section of the ACS, focusing on career management and development
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09/12/17
Financial Questions. Start-up Stock Options Offer
Filed under: Recent Posts, Job Offer (Situations), Mentoring, First Year on Job, Legal matters, Observ. Trends
Posted by: site admin @ 1:21 pm

This note points out that when you end your academic career,
your continuous learning process really ‘begins.’  And guess
what, there are no texts for this learning and no absolute, correct
answers.

.
What we learn is that mentors can help you ask the best questions
and it seems each individual’s situation and priorities are different.
.
My colleague AJ asked:

“I also wanted to seek your opinion on employee stock options.
As a part  of the offer, the company extended an option to
purchase 2500 shares of stock…the company  is not public.
….attached is a document here for reference.
Before signing, I just thought of having a word with you.”

.
Each situation is different, but the specific wording and specific
details of the offer are very important.

My experience is that I trusted the public relations of a firm
I worked for and purchased many shares of stock with the
promise of growth and profits.  In the end, I lost a great deal
of investment dollars that I could have avoided if I studied
the investor literature and consulted wise counselors.

.
AJ advised me that he is contributing 8% of his salary in the
company 401K and has some short term expenses.  He will
check into the latest date when he must decide.  My advice to
him:
I totally understand your quandary.  I would have a similar problem
with this question, so I refer to Al Sklover Link is where I would start.  

[He describes critical questions AJ should ask before signing any 
documents.] 

Then, the next article is quite significant: in that it describes “traps” we
can find ourselves in when working at a start up.
It may be worth speaking with Al directly:
.
This could be a sizable dollar commitment for you, AJ.  Al is
very professional and knowledgeable.  $100 spent on solid legal 
advice can result in much more savings in a speculative situation.
 

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