I work for a real estate startup which got acquired recently. I am a developer and employee #1.<p>Suppose I have 1% equity vested over 4 years with 1 year cliff, what will happen to my stocks?<p>The company started in June 13, so none of my stock options are vested yet. I have read about single trigger and double trigger but couldn't fully understand it.<p>Its a cash-stock deal. Do I get any cash out of this aquisition?
You are going to need to read your paperwork, nobody here can advise you on what is actually going to happen.<p>On all my share option deals I specifically ask for an instant vesting on a sale/listing event (i.e. we get acquired or we make IPO, I don't need to wait any longer), and when requesting it I normally get asked for an agreement to do a work-in on acquisition - it means the acquiring company is not obliged to, but may, have me work on their team for a year or two post-acquisition so the stuff inside my head doesn't walk on me becoming rich overnight.<p>However, this is not standard to my knowledge. I have always had to ask for it. Did you? Maybe it was put in place by your employer, maybe it wasn't.<p>So, read your paperwork, ask your boss, go and seek out professional guidance with your paperwork in tow if you need to.<p>Good luck, and (hopefully!) congratulations!
I've been through three acquisitions/liquidity events. The second was my own company.<p>It all depends on what your stock option program says. Both of the times I worked for someone else, all options automatically vested on a liquidity event. A liquidity event being the acquisition of the company. This seems pretty standard so it may be the case for you. I don't want to get your hopes up because it depends on your stock option program<p>That being said, the first acquisition I went through, the acquiring company purchased the IP and not the company. The board of directors declared that this didn't count as a liquidity event. Therefore, none of our stock options vested . We all still received 6 figure retention bonuses in cash and stock from the acquiring company that vested over so many years.<p>tldr; It seems pretty standard in the industry that your options would automatically vest on an acquisition. Even if they don't, it's likely that the acquiring company will offer you some kind of bonus to continue working for them.
You get to say you were lead developer and employee #1 of a startup that sold for x when doing your own startup (this can actually be useful!)<p>You can also now negotiate market level salary or a loyalty bonus to stay and ensure smooth takeover/handover. You are likely to get more this route than via your equity if you have 1%.
> Suppose I have 1% equity vested over 4 years with 1 year cliff, what will happen to my stocks?<p>What does your employment agreement say? Depending on the terms you'll have either 0%, 0.2%, 1%, or some other amount. Really hard to say anything without knowing what's in your employment contract and the types of stock you were issued.<p>> Its a cash-stock deal. Do I get any cash out of this acquisition?<p>Again, you'd have to read the terms of the deal. They might pay back the investors at a multiple, and split up the rest to the employees. And it's possible what's left for the employees could be very little, nothing, or a lot. It's really hard to say without any information.<p>If I were you, I'd read carefully through all the employment forms you signed. And if it's overwhelming, you should have a lawyer read them over to gain a bigger understanding.<p>Just know that 1% equity doesn't necessarily mean 1% of the deal. It all depends on the terms and the class of stock issued.
All depends on the ethics of the founders and the internal politics. Paperwork has no value unless you had a top lawyer write the terms for you when you joined. Legally, you have no equity right now, but in all likelihood you will get something eventually when you sell some stock unless you have exceptionally shitty founders.
Sorry, but you probably won't get anything if none of your equity is vested yet. You need to check your employment agreement to see if there is an acceleration clause that accelerates the vesting of some/all of your equity in the event of an acquisition or other ownership transfer.<p>Otherwise, if you're lucky, you might get a job at the acquirer with a salary bump.
You haven't hit your 1-year cliff, so I'm guessing unless the founder feels some pity/gratitude towards you, or your equity vest/employment continues beyond the acquisition (with the new parent) at the same terms, they're not legally bound to give you anything =/
Yeah, you don't have enough information to decide.<p>1. What was the strike (and market cap/valuation) when you got your options?<p>2. What was the acquisition price per share? How many shares are outstanding?<p>3. How much did you get diluted when they raised money? Include liquidation preferences.<p>4. Is there any accelerated vesting clause on acquisition? Can they fire you and you get nothing? The fact that they haven't tried firing you to cheat you suggests your options aren't worth much.<p>Lesson for next time: When you are offered options as part of an employment agreement, ask for a written contract and ask for details! Even if you do have a good written agreement, you can still be ruined by liquidation preferences given to new investors after you join.
I'd always assumed it would be standard for all stock to vest immediately in the case of an acquisition, otherwise there's not much incentive for the employee to help you get acquired quickly (if that's the goal).
As others have said, this will depend on the specifics of your case (i.e. the employment and other agreements between you and the company).<p>However, you implied a question about single/double trigger. If your contract mentions single trigger vesting, it _typically_ means that some/all of your equity vests on a sale of all or substantially all of the company. Double trigger vesting is similar, but would require a second event (usually your position being no longer available, e.g. if you were CTO and the acquirer didn't need two CTOs) to trigger vesting.
This happened to me. The ability to say you were employee #1 in an acquisition is much more valuable. I was fortunate that the acquiring company hired me and gave me equivalent options at the same vesting schedule. I eventually left to do my own thing, and funny enough, I'm now in the real estate business too.
For anyone else reading this. Anything that talks about equity isn't like an employment contract (ever) and you should always read every word.<p>Same with a 7-page term sheet. Read every word! There is no such thing as "standard".