Stock Options 💰 Employee stock options explained!

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Stock Options 💰 Employee stock options explained!
What are stock options? How are options valued? What is vesting? What happens when the options are exercised? Why should employees value them?
When employees don’t understand options, they can’t appreciate what the company is giving them. In this episode I cover everything they need to know about their incentive stock options.
Read the blog post for this episode here: FeelTheBoot.com/blog/options-...
Incentive stock options are one of the main forms of compensation in startups.
As an entrepreneur, you need to understand how to leverage stock options and equity to motivate your employees. This is all categorized as equity compensation.
Appropriate vesting schedules protect you from giving a piece of your company to an underperforming early hire.
Startup employees need the value of stock options explained to them.
A strong stock options plan can be a key tool for recruiting.

Пікірлер: 34

  • @FeeltheBoot
    @FeeltheBoot3 жыл бұрын

    If you are an early-stage founder and would like to get some individual feedback and advice, I provide free office hours weekly. They are exclusive to Feel the Boot members, so sign up free at FeelTheBoot.com/join

  • @tacrewgirl
    @tacrewgirl7 ай бұрын

    Best video that I've seen explaining stock options. Clear and concise. Thanks!

  • @FeeltheBoot

    @FeeltheBoot

    7 ай бұрын

    Many thanks!

  • @stevestojan
    @stevestojan2 жыл бұрын

    This was absolutely excellent. Making a career change and was offered a good amount of stock options. This is the first video that explained them in an easy to understand way that was thorough enough to hit all the key questions. Thanks so much!

  • @FeeltheBoot

    @FeeltheBoot

    2 жыл бұрын

    Wonderful! That is exactly what I was hoping to accomplish.

  • @amuseinthecraftroom6257

    @amuseinthecraftroom6257

    2 жыл бұрын

    @@FeeltheBoot do you have any videos on espp and rsu?

  • @FeeltheBoot

    @FeeltheBoot

    2 жыл бұрын

    @@amuseinthecraftroom6257 Not yet, but thanks for the suggestion. Employee Stock Purchase Plans (espp) are only available to public companies, so they would not be so relevant to Feel the Boot's startup audience. RSU are certainly worth talking about, particularly how they compare to employee stock options. I have two episodes on options. This one, focused on the employee perspective, and one from the founder/CEO perspective kzread.info/dash/bejne/k6tlraOuZ9fVY9Y.html

  • @Lourd-Bab
    @Lourd-Bab3 ай бұрын

    Amazing video, A friend of mine referred me to a financial adviser sometime ago and we got to talking about investment and money. I started investing with $150k and in the first 2 months, my portfolio was reading $274,800. Crazy right!, I decided to reinvest my profit and get more interesting. For over a year we have been working together making consistent profit just bought my second home 2 weeks ago and care for my family.

  • @Lourd-Bab

    @Lourd-Bab

    3 ай бұрын

    @Dunker762 However, if you do not have access to a professional like JUDITH ANN PEACE, quitting your job to focus on trading may not be the best approach. It is important to consider all options and seek guidance from reliable sources before making any major decisions. Consulting with an AI or using automated trading systems can also be helpful in managing investments while balancing other commitments

  • @Lourd-Bab

    @Lourd-Bab

    3 ай бұрын

    @Dunker762 Judith Ann peace is her name

  • @Lourd-Bab

    @Lourd-Bab

    3 ай бұрын

    Lookup with her name on the webpage.

  • @Lourd-Bab

    @Lourd-Bab

    3 ай бұрын

    @Dunker762 You are welcome .

  • @lete93
    @lete933 жыл бұрын

    Great video! Thank you very much for putting this out.

  • @FeeltheBoot

    @FeeltheBoot

    3 жыл бұрын

    Thanks! Let me know if there are any other topics you would like me to cover.

  • @brucemcgrath1922
    @brucemcgrath19222 жыл бұрын

    Wow I love this video! What a fantastic and thorough explanation. I would love to consume more of your content if it were targeted toward corporate finance concepts.

  • @FeeltheBoot

    @FeeltheBoot

    2 жыл бұрын

    Thanks! That is a great thought. It is not my specialty, but I suspect there is quite a bit more overlap between corporate finance topics and things early-stage founders need to know.

  • @FeeltheBoot

    @FeeltheBoot

    2 жыл бұрын

    Have you looked at the episode on financials for pre-revenue startups? kzread.info/dash/bejne/Yp2Zttyjqberdqg.html

  • @JDWilliamsPD
    @JDWilliamsPD2 жыл бұрын

    Bravo!

  • @LanceMCottrell

    @LanceMCottrell

    2 жыл бұрын

    Thanks!

  • @tylerfriend5861
    @tylerfriend5861 Жыл бұрын

    Great video thank you - general question. If you are considering leaving a company - do you need to wait for an equity event to occur, or just until you are fully vested to exercise your options? Not a public company so it would be a buy back of the stock by the company. Thx.

  • @FeeltheBoot

    @FeeltheBoot

    Жыл бұрын

    Usually, you can exercise your vested options at any time. Whether you want to wait for full vesting before leaving depends on the next opportunity. Some startups will agree to buy back the stock, cashing you out, but others might make you hold the stock until there is a liquidity event. In most cases, you must exercise your options within 30 days of leaving, or they expire.

  • @greatmaddyave
    @greatmaddyave Жыл бұрын

    I've watched dozens of videos and read countless articles and no one seems to be able to answer my question. After 4 years Im fully vested and have 30k options at 2.47 however the company has actually devalued in the past year because of covid and a share is valued at 1.97 if I were to buy it outside of options. Does this mean my options have no value and I waited all that time for nothing?

  • @FeeltheBoot

    @FeeltheBoot

    Жыл бұрын

    Unfortunately, yes it does. If the company wants to keep you around, they might be willing to reissue the options at the current fair market value. They would still be worthless now but have more potential for upside if the company recovers.

  • @GingerDrums
    @GingerDrums6 ай бұрын

    Music is way too loud... Shame it distracts from the good content

  • @FeeltheBoot

    @FeeltheBoot

    6 ай бұрын

    Thanks for the feedback. You are not the only person to think so. More recent episodes have the short music segments much lower in the mix.

  • @GingerDrums

    @GingerDrums

    6 ай бұрын

    @@FeeltheBoot I mix films for a living in fact. In addition to this being too loud it also has a lot of midrange. You can also reduce the masking / offending frequencies with an EQ, try a broad cut of around 3db to the midrange around 1khz.

  • @FeeltheBoot

    @FeeltheBoot

    6 ай бұрын

    That is super helpful! Could you listen to a bit of a recent episode and let me know if you still hear that problem? Maybe this one kzread.info/dash/bejne/iJ9lpZiegbLaaKw.html Unfortunately, I can't go back and fix old videos without removing and re-uploading them.

  • @GingerDrums

    @GingerDrums

    6 ай бұрын

    @@FeeltheBoot The music does not have the correct profile for background music. The level is more appropriate, but the song has modulating, distorted midrange exactly in the vocal range, so to put it frankly, its not a good choice. Just leave out the music or pick something way softer.

  • @ak5258
    @ak525810 ай бұрын

    that thumbnail gave me so much anxiety. Eyes so big, lips down, eyebrows up like I fuck up big time.

  • @FeeltheBoot

    @FeeltheBoot

    10 ай бұрын

    Ha! 🤣 Sorry about that! I was not going for such a stern aspect.

  • @Mr.219
    @Mr.21911 ай бұрын

    In other words its really not worth it

  • @FeeltheBoot

    @FeeltheBoot

    11 ай бұрын

    It depends on what you value. Many people have gotten very rich from options. Others worked for sub-market wages, and the options ended up worthless. Whether they make sense for you depends on your risk tolerance and immediate need for cash. Working in a startup is an amazing learning experience. Most startups are cash-poor, so they can't pay you what you are worth. Options are an attempt to fairly compensate employees who agree to forego most of their salary. If you don't value the possible upside and learning opportunities, startups are probably not for you.

  • @flex1661

    @flex1661

    5 ай бұрын

    Not true. My friend made over 1 million dollars from a pharmaceutical company buyout

  • @addanametocontinue

    @addanametocontinue

    4 ай бұрын

    The few hundred grand in my stock portfolio from when my company went public would disagree. But you're right, if take a below market salary in return for stock options, it might not be worth it, considering most companies never go public and become valuable.

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