37

No, private companies have no obligation to help you sell their shares. It may not be legal, but there is very little you can do short of suing the company. Great article about this from the Wall Street Journal here. You could approach the company and ask if they are interested in buying back shares, or if they know anybody who is interested in buying. But ...


24

The company going public is probably your best chance of being able to sell your shares. Therefore, your first job should probably be to try and see if there are any indicators that this might still happen: scour their website and financial news websites for anything that might indicate that this is still a possibility. If you do still have contacts within ...


9

In general, shares in a private company aren't worth anything. (Unless the company is paying dividends or they give voting privileges or something.) There's no good way to convert them into cash unless the company is buying.


5

In your comment you note that your company is not yet listed. This is important. So, what are stock options worth? Let's give some scenarios: 1: The company becomes public, and starts selling shares to anyone who asks. The stock reaches a certain price higher than the option price, and you use your stock options to get a nice payday. 2: The company gets ...


4

If you watch episodes of shark tank, you might gain some insight into the uniqueness of deals that are dependent upon a myriad of other factors. Having to choose, the three will typically split the equity in the company equally. That is smart because if you are a 40%, 20%, or 10% owner of a failed business it really doesn't matter. Also, on the flip ...


4

Companies that offer compensation in stock have to withhold the tax of the employee's income. This is common in RSU (Restricted Stock Unit) and RSA (Restricted Stock Award) arrangements that publicly traded tech companies offer. Things you receive as compensation are taxed as income at the value you received them at. Simple as that. It doesn't matter if it ...


3

Assuming that is in the US, this depends whether these are ISO (Incentive Stock Options) or NQ (Non-qualifying) stock options. NQ Options: The paper gain (or spread) is taxed as regular income. So yes, you need to pay taxes on the exercise in the tax year 2019. If it's a lot you may need to pay estimate taxes earlier or risk an underpayment penalty. You ...


2

Stock options are hard to value since there is a lot of risk associated with it. The amount of risk varies a lot with the specifics. They are worth less than the projected win and more than 0. The tricky part is: how to put a number against that? You want to look at Strike price vs current price Business plan, future outlook. Is there a market for this ? ...


2

Often, an equity agreement is based on whoever will contribute most to the company’s ultimate success. For example, if Bill Gates were to do absolutely nothing other than invest a nominal amount of money attach his name to the company so that you could capitalize on his name and clout, that would still be worth a substantial chunk of equity, probably even ...


2

Around $32,600 of discount/spread in exercised ISOs would give you a roughly equivalent total tax between the regular and AMT systems. With these numbers, under the regular tax system you'd pay $22,679 in federal income tax. Your tentative minimum tax (TMT) would be $22,672. If your ISO spread went up to $32,700, your TMT would go up to $22,698, and since ...


2

To repeat a standard disclaimer but this is something you should approach a tax consultant with. You already seem to have an estimate of $1.2M (which I'm not sure how you have). The best reference sites are still approximations. Also note, that you pay the higher of AMT and your usual income tax. As for possibly selling your stocks, you could look into ...


2

I will add that there are significant tax complications when exercising option grants. As just one example, if you exercise when the stock price is above the exercise price but you don't sell the stock, you have AMT taxable income for the implied income that is the difference between the stock price and the exercise price. If the stock then tanks you end up ...


2

You are given the options. At or after the vesting date, you can use your own money to buy the stocks at the exercise price. Typically you would only do this when the actual stock price is higher than the exercise price, and you would buy and the immediately sell the stocks. You would have to pay tax on the profit but sometimes it is possible to have the ...


2

First, read the rules carefully. If necessary, talk to your manager and co-workers until you understand what your options are. My option was slightly different than what you described, and I am sure that there are other minor variations. Yes, you will need to put in money to buy the shares if you choose to exercise your option. If the stock price goes up, ...


2

To answer your question: No. Stock options aren't worth as much as shares, because if they were, there would be no reason to not just buy the stock outright. The price of an option is based on the different between the current price (whatever that is) and the strike price (which in your case is 35 cents) with a floor of 0, plus some time value based on the ...


2

A stock option gives you the option to purchase shares in the future at a particular prices which is specified when the options are granted, say $100 (called the strike price). If the stock goes up after the options are granted, to $110, for example, you have the option the purchase one share for $100, which you can then immediately sell for $110, getting ...


2

Your concern seems to be the need to put up cash to exercise the options. You would only do this, of course, if the stock is worth more than the exercise price; that is where the value of the options comes from. However, the liquidity aspect is a legitimate issue. One approach, which may not be permitted by your terms, is to sell the options to someone else ...


2

There a few factors at play here. First, let me address the difference between the 409A valuation and the recent round of financing. Venture capital investors typically invest in preferred shares of a company rather than the common shares issued to founders and employees. The preferred shares can include special rights and protections, such as: (1) ...


1

what happens if the company goes bankrupt, or fails completely You would become a creditor that would seek repayment with the liquidation of assets. This would probably be considered wages, and in some jurisdictions wages have a higher priority for repayment. Depending upon the depth of the failure, you would probably get most of your funds returned. ...


1

You can reach out to the company and see if they are interested in buying you out. Depending on local laws (IANAL), to do that, they might have to issue a buyback. Smaller, privately held, companies probably won't do that as they lack the necessary cash. Your next option is to do your own research. Start with the state of Delaware's division of corporations:...


1

My main concern is that I've sacrificed some significant portion of my salary in order to receive these stock options and that they aren't actually worth anything They might end up worthless, but they also might end up being worth more than you paid for them. Let's take a simple example. Suppose you paid $5 per share for these options with a strike price ...


1

You are on the right track: since you didn't file a Section 83(b) election, no taxable event has occured until the SAR vested. So let's assume that at the time of vesting, each share had a fair market value of $10. At that point you had ordinary compensation income of $10, reportable on your W-2. Also at the point, you had acquired a cost basis of $10 per ...


1

They (being the to-be-acquired company's board of directors) can decide to issue the remaining 5M shares and have the acquiring company buy them. That means the acquiring company would have to buy some existing shares. That would almost certainly dilute the value of your shares. I say "almost certainly" because the acquirer might be buying your company for ...


1

Lets assume the authorized capital of the company is $100M. It can issue 10M shares of $10 each out of which it has issued 5M shares of $10 each. So its issued capital is 5M*$10=$50M. The company can issue another 5M shares but it has not. So currently the shares outstanding is 5M and investors' capital is $50M, which represents 100% of shareholders' holding....


1

In my experience, brokerages aren't required to provide cost basis for ISOs or other employer-provided stock grants. I've always had to manually calculate the cost basis based on the date of acquisition (which should be provided) and determine if the gains/losses are short- or long-term based on the date of sale(s). This has never been a problem for me, ...


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