What other personal financial questions are on your mind? Retirement Account Limits / Explained - Part 1: ua-cam.com/video/KwyME2yA3_8/v-deo.html Should I Refinances my Mortgage: ua-cam.com/video/ixxhJHRMBS4/v-deo.html
THIS FINALLY ANSWERED MY QUESTION I joined a start up and watched a million videos and was so confused. This video was clear and made sense. Thank you.
Can you direct me to other videos you have on stock plans for private businesses? How does a start-up, for example, establish a stock plan for new employees?
@Cynthea Wellings - my pleasure! Thanks for taking the time to check it out. You know, I watched a recent episode of The All-In Podcast and they discussed Stock Options for employees...they brought up a really good point in regards to Preferred Shares. Basically, if the startup company goes belly-up then the Preferred Shareholders will be paid back first BEFORE any common stock shareholder is able to receive any proceeds. So, if you have confidence that your new startup will not have this happen to them then you're all set....but if you think there could be a possibility then you should make yourself aware of this potential risk when deciding on how many stock options you should take when getting on board. Food for thought. Cheers!
FairThatsMe - Appreciate you! Glad you found a good nugget or two. Let me know if you have questions or if there are other video topics you’d be interested to watch that I haven’t covered yet. Always open to suggestions and I’ve got several lined up between now and end of the year. 👍🏻👍🏻
Thank you for this video...this was the best UA-cam for this topic...strike price is $4 on 7,000 shares...100% vested 2/2021...strike prices for new employees is $110...sounds good, right?
@Laura White - Thank you for taking time out of your day to watch the video and invest in your financial knowledge - well done on you for that! Appreciate the kind words...a CEO for a start up company had asked me to make it and I’m pleased to read your response. If my math is correct (based on what you shared)...you’ll have to spend $28,000 to get 7,000 shares of a stock valued at $770,000. If that’s how you read it as well then I suspect it’s a no brainer! Start gathering your acorns for February. 👊🏻👊🏻 Alternatively, you could do the “exercise & sell” option if it’s available to you and you’ll be left with the net difference between $742k. However, if you are a true believer in the company (and have the cash) then that $28k worth of stock could increase in value and you may want to exercise the full $28k with cash out of pocket. I’m super happy for you!!! 😃
@@laurawhite24-7 - Understood. I hear ya. Happy to help however I can...I used to be an advisor for a while and have flipped the coin to education/empower people to make confident financial decisions on your own without needing to pay advisors fees for decades. So if you're willing to learn and invest time into making decisions on your own then you're in the right spot! Between now and then if there are any other financial topics you'd like to see a video on - please feel welcome to share. Congrats on your opportunity and I look forward to hearing an update down the road. Happy New Year! Keep up the hard work...it does pay off.
We can convert bonus to ESOP. Do you suggest that I convert all of my bonus to ESOP or only a certain percentage or cash out my bonus? The company that I'm employed with is a start-up company so this is a pre-IPO stock
Personally, I wouldn’t do that with all of the bonus, but if I’m super confident in where the company will grow and you have a direct impact in the company getting there…then in a small way sending more bonus to esop is like betting on you and those around you to deliver. Sounds like going to the casino, but you’re the one with the edge…it’s still a gamble, but could be great if it pans out. Only you and those closest to you in the company have the knowledge to know where your private company could go once it’s public…I’m just a guy from Forida typing on my phone on a Saturday morning from my bedroom about to have a coffee. Lol. I’m curious though, let me know what you decide!
S. Gray - Thanks for the kind words, boss! I currently only have this one video regarding stock options. However, I do have several other videos that relate to financial planning, building wealth, taxes, and a few in between. Is there something specific you’d like to learn more about? If you have a suggestion I’ll try to work it into my content calendar.
who determines the strike price, and based on which factors ? At an early stage (pre-seed), the strike price should be at the lowest, right ? Then does it make senese to buy the shares if there are personal savings available (of course it depends on how much % will be spent from the personal savings, I would say 10% is ideal to spend on buying my own shares upfront at the beginning). btw stunning content and crystal clear !!
@Ahmed K. Moustafa - The Founders/CEO/Board of Directors would agree on the strike price long before interviewing a candidate. Upon establishing the stock share structure of the company they would allot a certain amount of shares as a whole that would be ear-marked for compensation offers to future hires. Yes, the earlier the company, it would be my assumption that the strike price would be the lowest. Regarding when to buy the shares as an employee…this is case by case…because some companies may not be successful for reasons outside your control - like due to economic factors or industry changes and then you’ll have shares of a company that are worthless. Regarding your personal finances, then I’ll lean a little more on the Dave Ramsey philosophy here. Meaning, it would be prudent to have little to no debt & a really good savings amount still intact after buying the shares…so if you have the money and feel confident the company will eventually have a liquidation event for you to capitalize on then for sure go ahead and buy them outright if possible. Hey, thanks for checking out the vid…hope some of the other videos are helpful. Comment if you have questions and I’ll do my best to help if I can…or I’ll at least point you in the right direction if I don’t know the answer. Cheers boss! Hope you do well at your start up!
@USAsuperstore - It is my understanding that during the pre-IPO time frame the only 'liquidation event' that could happen in order for you to be able to exercise and sell your shares would be if there is another seed round or new investor(s) that come aboard whom you could sell your shares to...otherwise you'd have to wait for the company to go public before you could sell. If you discover otherwise please feel welcome to reply to this thread/comment and let me know. Hey, thanks for taking the time to check out this video...hopefully there are others within my content library that are also of interest to you. Appreciate you...cheers!
What if the start up is offering three different options but they don’t give you the number of shares, they tell you a percentage for your three options with of course the three different salary options? What does that percentage even mean? Is it a percentage of the common stock pool? And if it is, what does that mean? Don’t the numbers of shares available in the common stock pool change?
@Courtney Shane - Overcoming Obstacles - GREAT questions! I could try to answer them for you, but I believe the better person to ask would be someone in your HR department (or the CEO / Founder themselves if your start up is small enough for you to ask them directly). My gut instinct tells me that the percentage would be a percentage of your income that could be used to purchase company stock...but again that is just me guessing. Yes, the number of shares available will change/fluctuate as more and more new employees make their compensation selections...then as the pool of shares gets smaller the founders/CEO/Board Members will need to address and vote on how to proceed from that point moving forward...meaning...do they stop offering new employees stock options OR do they increase the number of shares available for that purpose. Thanks for taking the time to check out the video...hope there are a few other one on the channel that will help you on your financial journey towards retirement / financial independence. Cheers boss lady!
What other personal financial questions are on your mind?
Retirement Account Limits / Explained - Part 1: ua-cam.com/video/KwyME2yA3_8/v-deo.html
Should I Refinances my Mortgage: ua-cam.com/video/ixxhJHRMBS4/v-deo.html
THIS FINALLY ANSWERED MY QUESTION I joined a start up and watched a million videos and was so confused. This video was clear and made sense. Thank you.
@Ashley Aliberti - Well thank you! Congrats on joining your start up…hope it goes smoothly and brings you joy and prosperity. Cheers boss lady!
FINALLY a video that explains exactly what I needed to know!
Really well said. Helped a ton. Keep it up.
Can you direct me to other videos you have on stock plans for private businesses? How does a start-up, for example, establish a stock plan for new employees?
Very helpful. Thanks
@Cynthea Wellings - my pleasure! Thanks for taking the time to check it out.
You know, I watched a recent episode of The All-In Podcast and they discussed Stock Options for employees...they brought up a really good point in regards to Preferred Shares. Basically, if the startup company goes belly-up then the Preferred Shareholders will be paid back first BEFORE any common stock shareholder is able to receive any proceeds.
So, if you have confidence that your new startup will not have this happen to them then you're all set....but if you think there could be a possibility then you should make yourself aware of this potential risk when deciding on how many stock options you should take when getting on board. Food for thought.
Cheers!
You're the man! Subbed, thank you for the info!
FairThatsMe - Appreciate you! Glad you found a good nugget or two. Let me know if you have questions or if there are other video topics you’d be interested to watch that I haven’t covered yet. Always open to suggestions and I’ve got several lined up between now and end of the year. 👍🏻👍🏻
Thank you for this video...this was the best UA-cam for this topic...strike price is $4 on 7,000 shares...100% vested 2/2021...strike prices for new employees is $110...sounds good, right?
@Laura White - Thank you for taking time out of your day to watch the video and invest in your financial knowledge - well done on you for that! Appreciate the kind words...a CEO for a start up company had asked me to make it and I’m pleased to read your response.
If my math is correct (based on what you shared)...you’ll have to spend $28,000 to get 7,000 shares of a stock valued at $770,000. If that’s how you read it as well then I suspect it’s a no brainer! Start gathering your acorns for February. 👊🏻👊🏻
Alternatively, you could do the “exercise & sell” option if it’s available to you and you’ll be left with the net difference between $742k. However, if you are a true believer in the company (and have the cash) then that $28k worth of stock could increase in value and you may want to exercise the full $28k with cash out of pocket. I’m super happy for you!!! 😃
@@Financial_Awareness downside might be that its a big private aerospace company...but when we hit it big I'm calling YOU for help!
@@laurawhite24-7 - Understood. I hear ya. Happy to help however I can...I used to be an advisor for a while and have flipped the coin to education/empower people to make confident financial decisions on your own without needing to pay advisors fees for decades. So if you're willing to learn and invest time into making decisions on your own then you're in the right spot! Between now and then if there are any other financial topics you'd like to see a video on - please feel welcome to share. Congrats on your opportunity and I look forward to hearing an update down the road. Happy New Year! Keep up the hard work...it does pay off.
We can convert bonus to ESOP. Do you suggest that I convert all of my bonus to ESOP or only a certain percentage or cash out my bonus? The company that I'm employed with is a start-up company so this is a pre-IPO stock
Personally, I wouldn’t do that with all of the bonus, but if I’m super confident in where the company will grow and you have a direct impact in the company getting there…then in a small way sending more bonus to esop is like betting on you and those around you to deliver. Sounds like going to the casino, but you’re the one with the edge…it’s still a gamble, but could be great if it pans out. Only you and those closest to you in the company have the knowledge to know where your private company could go once it’s public…I’m just a guy from Forida typing on my phone on a Saturday morning from my bedroom about to have a coffee. Lol.
I’m curious though, let me know what you decide!
Great content!!! Did you have info like this regarding stock grant option?
S. Gray - Thanks for the kind words, boss! I currently only have this one video regarding stock options. However, I do have several other videos that relate to financial planning, building wealth, taxes, and a few in between. Is there something specific you’d like to learn more about? If you have a suggestion I’ll try to work it into my content calendar.
who determines the strike price, and based on which factors ? At an early stage (pre-seed), the strike price should be at the lowest, right ? Then does it make senese to buy the shares if there are personal savings available (of course it depends on how much % will be spent from the personal savings, I would say 10% is ideal to spend on buying my own shares upfront at the beginning).
btw stunning content and crystal clear !!
@Ahmed K. Moustafa - The Founders/CEO/Board of Directors would agree on the strike price long before interviewing a candidate. Upon establishing the stock share structure of the company they would allot a certain amount of shares as a whole that would be ear-marked for compensation offers to future hires.
Yes, the earlier the company, it would be my assumption that the strike price would be the lowest. Regarding when to buy the shares as an employee…this is case by case…because some companies may not be successful for reasons outside your control - like due to economic factors or industry changes and then you’ll have shares of a company that are worthless.
Regarding your personal finances, then I’ll lean a little more on the Dave Ramsey philosophy here. Meaning, it would be prudent to have little to no debt & a really good savings amount still intact after buying the shares…so if you have the money and feel confident the company will eventually have a liquidation event for you to capitalize on then for sure go ahead and buy them outright if possible.
Hey, thanks for checking out the vid…hope some of the other videos are helpful. Comment if you have questions and I’ll do my best to help if I can…or I’ll at least point you in the right direction if I don’t know the answer. Cheers boss! Hope you do well at your start up!
@@Financial_Awareness heyy K. Scholl .. thanks for the response.. I appreciate the details you have added here.. all the best with your content ..
@Ahmed K. Moustafa - Thank you!
For startup pre-IPO, can we also do "Exercise and sell"? Who's buying the pre-IPO stocks?
@USAsuperstore - It is my understanding that during the pre-IPO time frame the only 'liquidation event' that could happen in order for you to be able to exercise and sell your shares would be if there is another seed round or new investor(s) that come aboard whom you could sell your shares to...otherwise you'd have to wait for the company to go public before you could sell. If you discover otherwise please feel welcome to reply to this thread/comment and let me know.
Hey, thanks for taking the time to check out this video...hopefully there are others within my content library that are also of interest to you. Appreciate you...cheers!
@@Financial_Awareness Thanks for your clear explanation. cheers.
How can we ask the company to participate in secondary market for benefits of employees?
@pami tset eth - Maybe start by just asking and see what they say.
@@Financial_Awareness they said NO :(. Is it because it isn't in their best interest?
What if the start up is offering three different options but they don’t give you the number of shares, they tell you a percentage for your three options with of course the three different salary options? What does that percentage even mean? Is it a percentage of the common stock pool? And if it is, what does that mean? Don’t the numbers of shares available in the common stock pool change?
@Courtney Shane - Overcoming Obstacles - GREAT questions! I could try to answer them for you, but I believe the better person to ask would be someone in your HR department (or the CEO / Founder themselves if your start up is small enough for you to ask them directly). My gut instinct tells me that the percentage would be a percentage of your income that could be used to purchase company stock...but again that is just me guessing.
Yes, the number of shares available will change/fluctuate as more and more new employees make their compensation selections...then as the pool of shares gets smaller the founders/CEO/Board Members will need to address and vote on how to proceed from that point moving forward...meaning...do they stop offering new employees stock options OR do they increase the number of shares available for that purpose.
Thanks for taking the time to check out the video...hope there are a few other one on the channel that will help you on your financial journey towards retirement / financial independence. Cheers boss lady!