Wow, I hadn't thought about the "options" part of stock options for employee compensation. That is definitely completely insane and unfair to the employees. The only way it might be somewhat fair is if all of that was explained to them in great detail yet simply, like someone sitting with them and making sure they really understand it before accepting employment, but I doubt it is typically done that way. If it is part of the employees compensation, they should not be receiving stock options, they should be receiving stock. The option to buy the stock is ridiculous. Even if you had that kind of money to buy the options at your opportunity, why would you want to spend your money on an unproven company that is trying to get acquired or go public what there are plenty of already proven and great opportunities on the stock market. Especially now with companies like Robinhood and M1 offering both no commission trading and fractional share investing, this is the best time in history for the average person to invest in the stock market. Just make a small deposit into your trading account every time you get paid, and have a plan in advance for what percentage of it will go into each stock, and use fractional shares to make that happen with each deposit.
Especially now when the giants make it hard for businesses to compete and they just keep getting bigger and bigger. So instead of trying to compete with them just buy their stock, even if you can only afford a small fraction at a time. Plus there are still amazing smaller opportunities that come up from time to time. Like everyone in tech knew Zoom was where it was at, even before Covid 19, so they shoulduld have bought shares when it first went public.
The founders are the ones that should be taking on the risk of a startup not the employees, that is the whole point of preferring being an employee rather than starting your own company. Otherwise they may as well start their own company and get to do whatever they want. As you described it, it sounds like the worst of both combinations. You still are working for someone else, have to answer to them and work on what they tell you to, but you also are taking on a lot of the risk of starting a company, plus they will probably never get to exercise their options anyway. So even if the company does become wildly successful, most of the employees will not benefit from that. That sounds like they are really just being bullies taking advantage of the naivety of the employees. In that sense it almost sounds like a shady business deal that is borderline stealing from the employees on an ethical level.
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Wow, I hadn't thought about the "options" part of stock options for employee compensation. That is definitely completely insane and unfair to the employees. The only way it might be somewhat fair is if all of that was explained to them in great detail yet simply, like someone sitting with them and making sure they really understand it before accepting employment, but I doubt it is typically done that way. If it is part of the employees compensation, they should not be receiving stock options, they should be receiving stock. The option to buy the stock is ridiculous. Even if you had that kind of money to buy the options at your opportunity, why would you want to spend your money on an unproven company that is trying to get acquired or go public what there are plenty of already proven and great opportunities on the stock market. Especially now with companies like Robinhood and M1 offering both no commission trading and fractional share investing, this is the best time in history for the average person to invest in the stock market. Just make a small deposit into your trading account every time you get paid, and have a plan in advance for what percentage of it will go into each stock, and use fractional shares to make that happen with each deposit.
Especially now when the giants make it hard for businesses to compete and they just keep getting bigger and bigger. So instead of trying to compete with them just buy their stock, even if you can only afford a small fraction at a time. Plus there are still amazing smaller opportunities that come up from time to time. Like everyone in tech knew Zoom was where it was at, even before Covid 19, so they shoulduld have bought shares when it first went public.
The founders are the ones that should be taking on the risk of a startup not the employees, that is the whole point of preferring being an employee rather than starting your own company. Otherwise they may as well start their own company and get to do whatever they want. As you described it, it sounds like the worst of both combinations. You still are working for someone else, have to answer to them and work on what they tell you to, but you also are taking on a lot of the risk of starting a company, plus they will probably never get to exercise their options anyway. So even if the company does become wildly successful, most of the employees will not benefit from that. That sounds like they are really just being bullies taking advantage of the naivety of the employees. In that sense it almost sounds like a shady business deal that is borderline stealing from the employees on an ethical level.