Can you sell your shares in a startup?
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It usually comes as a surprise when tech and startup employees learn that they can sell their shares before their startup goes public – this is frequently referred to as liquidity. That’s right: liquidity provides startup employees the ability to find a buyer and sell their pre-IPO shares.
Should I sell my startup stock?
You don’t have to sell your stock. Instead of selling, you may be able to get risk-free financing to exercise your stock. This will cover your exercise cost and your taxes. You only pay back when your company goes public or is acquired — and only if you make money.
There’s no perfect time to sell your startup stock, but a “do nothing” strategy is usually the least advantageous. You can start building a plan by learning about the type of options you have and how timing could impact your taxes.
Should co-founders own shares of the company they founded?
If a co-founder owns some shares of your company, he/she is automatically given some authority in decision-making processes. This elevates co-founders’ enthusiasm while showing your gratitude and respect to them.
What is a co-founder of a startup?
Co-founders and founders create the business. They have the most at stake, often contributing their own funds to get the company going and working crazy hours as they push to get the startup off the ground. Especially in the early days, the buck stops with them.
How often are shares vested in a startup company?
Shares for a startup company are often vested monthly, over a period of four years. The first 25 percent of shares are typically vested after the employee has passed the one-year cliff, meaning they have remained with the company for more than one year.
Investors claim 20-30\% of startup shares, while founders should have over 60\% in total. You may also leave some available pool (5\%), but don’t forget to allocate 10\% to employees.