جيثب خيارات الأسهم

خيارات الأسهم.
على هذه الصفحة.
مستويات منح خيارات الأسهم.
إذا قمت بإجراء عرض ترويجي، يجب أن نصدر منحة خيار الأسهم الجديدة لعدد من الخيارات التي تتطابق مع الفرق بين مستواك القديم والمستوى الجديد. هذا هو الحال أيضا إذا كان لديك حاليا خيارات أكثر مما يكون مستواك القديم مؤهلا له (على سبيل المثال، يمكن أن يحدث هذا إذا انضممت في وقت مبكر من تاريخ الشركة). إذا لم نكن يرجى الاتصال بعمليات الناس.
حول الملكية الخاصة بك في جيتلاب.
في جيتلاب نعتقد بقوة في ملكية الموظفين في شركتنا. نحن في قطاع الأعمال لخلق قيمة لمساهمينا، ونحن نريد موظفينا للاستفادة من هذا النجاح المشترك.
في هذه الوثيقة (يمكن الوصول إليها فقط لأعضاء فريق جيتلاب والمتقدمين)، يمكنك العثور على مزيد من التفاصيل حول عدد الأسهم القائمة والتقييمات الأخيرة.
ويهدف هذا الدليل لمساعدتك على فهم قطعة من جيتلاب أن you†™ إعادة الذهاب إلى امتلاك! هدفها هو أن تكون أكثر وضوحا من كامل جيتلاب 2015 خطة حوافز الأسهم (خطة حقوق الملكية “2015) واتفاق الخيار الأسهم الخاصة بك التي ينصح لك أن تقرأ، وكلاهما يدخل في التفاصيل القانونية الكاملة. ومع ذلك، يرجى ملاحظة أنه في حين نأمل أن يكون هذا الدليل مفيدا لفهم خيارات الأسهم و / أو الأسهم الصادرة لك بموجب خطة الأسهم لعام 2015، فإن الأحكام والشروط الحاكمة واردة في خطة الأسهم لعام 2015 واتفاقية خيار الأسهم ذات الصلة . يجب عليك استشارة محام التوظيف و / أو مستشار الضرائب إذا كان لديك أي أسئلة حول التنقل خيارات الأسهم الخاصة بك وقبل اتخاذ قرارات مهمة.
خيارات الأسهم.
في جيتلاب، نقدم منح حقوق الملكية في شكل خيارات الأسهم الحافزة (إيسوز) وخيارات الأسهم غير المؤهلة (نسو). الفرق في ھذین النوعین من المنح ھو بصفة عامة کما یلي: یتم إصدار إسو للموظفین الأمریکیین وتحمل شکلا خاصا من ضرائب المعاملة المعترف بھا من قبل دائرة الدخل الداخلي الأمریکیة (إرس). يتم منح مكاتب الإحصاء الوطنية للمقاولين وغير العاملين في الولايات المتحدة. ودعا هذا الخيار لأنه لديك خيار لشراء الأسهم جيتلاب في وقت لاحق، تخضع لشروط الاستحقاق، بسعر ممارسة المقدمة في وقت المنحة. فقط لأغراض مثلا، إذا تم منحك خيارات الأسهم مع سعر ممارسة 1 $ للسهم الواحد من الأسهم العادية اليوم، وإذا تنمو جيتلاب في وقت لاحق حتى أسهمها المشتركة يستحق 20 $ للسهم الواحد، سوف لا تزال قادرة على شراء المشتركة الأسهم عند ممارسة الخيار الخاص بك ل $ 1 للسهم الواحد.
السبب الذي نقدمه خيارات الأسهم بدلا من الأسهم على التوالي هو أنك لا تحتاج إلى إنفاق أي أموال لشراء الأسهم في تاريخ المنحة، ويمكن أن تقرر لشراء الأسهم في وقت لاحق كما سترة الخيارات الخاصة بك. بالإضافة إلى ذلك، نحن لا نقدم منح الأسهم على التوالي لأن هذا قد يخضع لك الالتزامات الضريبية الفورية. على سبيل المثال، إذا منحنا مبلغا قيمته 10،000 دولار أمريكي من أسهم جيتلاب اليوم، فسيتعين عليك دفع ضرائب على قيمة السهم (من المحتمل أن تكون آلاف الدولارات) لهذا العام الضريبي. إذا أعطينا لك خيارات بقيمة 10 آلاف دولار أمريكي من الأسهم، فإنك لا تتحمل أي ضرائب حتى تمارسها (المزيد من التمرين لاحقا). مرة أخرى، هذا هو ملخص عام للمعاملة الضريبية من الخيارات الخاصة بك ويجب عليك استشارة مستشار الضرائب قبل اتخاذ أي إجراءات في المستقبل والتي يمكن أن تؤدي إلى الالتزامات الضريبية.
يعني الانهاء أن عليك أن تظل موظفا من قبل، أو هي خلاف ذلك مزود خدمة ل، جيتلاب لفترة معينة من الوقت قبل أن تتمكن من امتلاك كامل الأسهم التي تم شراؤها تحت خيار الأسهم الخاصة بك. بدلا من إعطائك الحق في شراء وامتلاك جميع الأسهم العادية في إطار خيار الأسهم الخاصة بك في اليوم الأول، تحصل على امتلاك الأسهم تحت خيار الأسهم الخاصة بك في الزيادات مع مرور الوقت. وتسمى هذه العملية الاستحقاق وتقدم شركات مختلفة جداول استحقاق أطوال مختلفة. في جيتلاب، لدينا الممارسة القياسية هو إصدار خيارات مع جدول الاستحقاق لمدة أربع سنوات لذلك كنت تملك ربع المخزون الخاص بك بعد 12 شهرا، نصف الأسهم الخاصة بك بعد عامين، وكل ذلك بعد 4 سنوات. يحدث الصمود على أساس شهري (لذلك يمكنك استحقاق 1/48 من الخيارات الخاصة بك كل شهر)، ولكن العديد من جداول الاستحقاق تشمل المنحدر. الجرف هو فترة في بداية فترة الاستحقاق حيث الأسهم الخاصة بك لا تستحق شهريا، ولكن بدلا من ذلك سترات في نهاية فترة الهاوية. في معظم الشركات، بما في ذلك جيتلاب، هذه الفترة جرف عموما سنة واحدة. وھذا یعني أنھ إذا تركت عملك إما طوعیا أو إجباریا قبل العمل معك لمدة عام كامل، فلن یتم منح أي من خیاراتك. في نهاية ذلك العام، أنت لن تحصل على كامل السنة المالية (12 شهرا) من الأسهم في كل مرة. وهذا يساعد على الحفاظ على ملكية الأسهم جيتلاب للناس الذين عملوا في الشركة لفترة ذات مغزى من الزمن.
يتناول هذا القسم التخفيف الذي يحدث لجميع الشركات مع مرور الوقت. في الشركات العامة تصدر الأسهم من وقت لآخر في المستقبل. على سبيل المثال، إذا كانت الشركة شيز بحاجة إلى جمع الأموال من المستثمرين الخارجيين، فقد تحتاج إلى إنشاء مخزون جديد لبيعها لهؤلاء المستثمرين. تأثير إصدار أسهم إضافية من قبل شركة شيز هو أنه في حين أنك سوف تملك نفس عدد الأسهم كما فعلت قبل هذا الإصدار، سيكون هناك المزيد من إجمالي الأسهم المعلقة، ونتيجة لذلك، سوف تمتلك نسبة صغيرة من الشركة †"وهذا ما يسمى التخفيف.
التخفيف لا يعني بالضرورة انخفاض القيمة. على سبيل المثال عندما ترفع الشركة المال ستبقى قيمة الأسهم على حالها لأن التقييم الجديد للشركة سوف يكون مساويا للقيمة القديمة للشركة + رأس المال الجديد الذي تم جمعه. على سبيل المثال، إذا كانت الشركة شيز تساوي 100 مليون دولار وترفع 25 مليون دولار، فإن الشركة شيز تبلغ قيمتها الآن 125 مليون دولار. إذا كنت تملك 5٪ من 100 مليون دولار من قبل، فإنك تمتلك الآن 4٪ من 125 مليون دولار (20٪ من الشركة تم بيعها، أو قال بشكل مختلف، يخففك بنسبة 20٪). وكانت حصة 5٪ بقيمة 5M $ قبل جمع التبرعات وحصة 4٪ الآن بقيمة 5M $.
نافذة التمرين بعد الإنهاء.
يرجى ملاحظة أنه حتى انتهاء فترة الاكتتاب آخر انتهت (أو نحن اشترى) أسهم الشركة ليست سائلة. إذا انتهى عملك لأي سبب من الأسباب لديك نافذة لمدة 90 يوما لممارسة الخيارات الخاصة بك. خلال هذه النافذة عليك أن تأتي مع سعر التمرين، وفي بعض الحالات الضريبة على المكاسب في قيمة خيارات الأسهم الخاصة بك، والتي يمكن أن تكون كبيرة. إذا كانت أسهم الشركة ليست سائلة هذا المال قد يكون من الصعب أن تأتي من قبل. نافذة 90 يوما هي معيار الصناعة ولكن هناك حجج جيدة ضد ذلك. في جيتلاب المقصود من الخيارات الأسهم لارتكاب أعضاء فريقنا للحصول على لنا الاكتتاب الناجح. نحن نريد لتحفيز ومكافأة شعبنا لبلوغ هذا الهدف. لذلك سننظر في التمديد نافذة الملحقات فقط على أساس كل حالة على حدة في تقديرنا. مثال على الحالة التي سننظر فيها هو عضو فريق قيمة الإقلاع عن التدخين بسبب الظروف الشخصية. في معظم الحالات لن يكون هناك تمديد وسوف تضطر إما لدفع ثمن الأسهم والضرائب نفسك أو تفقد الخيارات، حتى عندما كنت مكتسبة تماما. وبطبيعة الحال الاكتتاب العام في عام 2020 هو طموحنا العام ولكن لا توقيت أو إذا كان يحدث على الإطلاق مضمونة.
الادارة.
نحن نستخدم إشاريس لإدارة برنامج خيار الأسهم لدينا. سوف تتلقى إشعار منحة إلى عنوان جيتلاب الخاص بك. النقر من خلال ذلك سوف تمكنك من إعداد حساب مستخدم في إشاريس. يمكنك أن تجد جميع الشروط والأحكام لبرنامج الأسهم وكذلك المنحة المحددة الخاصة بك داخل نظام إشاريس. وكملاحظة مفيدة، نقترح عليك إضافة عنوان شخصي آخر إلى ملفك الشخصي. ويمكن إضافة هذا عن طريق النقر على الملف الشخصي والأمن في الزاوية اليسرى السفلى من الشاشة الرئيسية بعد تسجيل الدخول إلى إشاريس.
ممارسة الخيارات الخاصة بك.
"ممارسة خياراتك" يعني شراء الأسهم التي تضمنها خياراتك. تدفع سعر التمرين الذي تم تعيينه عند منح الخيارات لأول مرة وتحصل على شهادات الأسهم مرة أخرى. لإعطاء الموظفين فرصة للاستفادة من أي حوافز ضريبية موجودة قد تكون متاحة (بما في ذلك بموجب قوانين الضرائب الأمريكية والقوانين الهولندية) جعلنا الأسهم قابلة للتنفيذ فورا. وهذا يعني أنه يمكنك ممارسة حقك في شراء الأسهم غير المكتسبة بموجب الخيار الخاص بك لبدء فترة عقدك. ومع ذلك، تحتفظ الشركة بحقوق إعادة الشراء للأسهم غير المكتسبة إذا انتهت خدمتك أو غيرها من الخدمات لأي سبب من الأسباب. قد يكون للممارسة المبكرة للمخزون غير المكتسب آثار ضريبية مهمة ويجب عليك استشارة مستشارك الضريبي قبل اتخاذ مثل هذا القرار.
كما أن للشركة الحق في إعادة شراء الأسهم غير المكتسبة عند انتهاء خدمتك، فإن الشركة غير ملزمة بذلك. وفقا لذلك قد تفقد بعض أو كل الاستثمار الذي قمت به. لأننا شركة شابة هناك الكثير من المخاطر حتى تكون على علم وأبلغ من المخاطر. يرجى قراءة هذا الموضوع كورا حول معظم الشركات الناشئة الفاشلة وهذه القصة من الناس يدفعون أكثر في الضرائب على مخزوناتهم من الحصول على العودة.
كيفية ممارسة خيارات الأسهم الخاصة بك.
يتم اعتماد الخيارات من قبل مجلس اإلدارة في اجتماعات مجلس اإلدارة ربع السنوية المقررة بانتظام. بعد الموافقة على المنحة من قبل المجلس سوف تتلقى إشعار منحة من قبل إشاريس التي تحتوي على معلومات ذات الصلة بالمنحة بما في ذلك عدد الأسهم، وممارسة السعر، وفترة الاستحقاق والمصطلحات الرئيسية الأخرى.
هناك طريقتان لممارسة أسهمك:
إليكترونيك (أوس ريسيدنتس أونلي) قم بتسجيل الدخول إلى حسابك في إشاريس اتبع التوجيهات لتمكين دفعات أش من البنك الذي تتعامل معه بعد تمكين أش حدد منح خيار التمرين واتبع دليل المطالبات (غير المقيمين في منطقة أش ومقيمين غير أمريكيين) سجل الدخول إلى حسابك في إشاريس انقر على " عرض "(الجانب الأيمن من الشاشة) انقر على" المرفقات والملاحظات "انقر على" نموذج اتفاقية التمرين "أكمل النموذج، علامة، والعودة كما بدف إلى المدير المالي إرسال الدفع بالدولار الأمريكي عن طريق التحويل الإلكتروني. سيتم توفير معلومات التحويل الإلكتروني.
ملاحظة للمقيمين في الولايات المتحدة: أيهما الأسلوب الذي تختاره، تأكد من تحميل نموذج الانتخاب 83 ب التي تقدمها إشارس والملف مع مصلحة الضرائب في غضون 30 يوما من التمارين الرياضية. إرسال نسخة من استمارة الانتخابات إلى المدير المالي.
سوف ترغب على الأرجح في تضمين الرسالة التالية عند إرسالها في الانتخابات 83 ب إلى مصلحة الضرائب.
إدارة الخزينة.
В «العنوان المقدم من إشاريس 83-b تعليماتВ»
إلي من يهمه الامر:
تجدون طيه نسختين من الانتخابات 83 ب فيما يتعلق شراء بلدي من أسهم شركة جيتلاب الأسهم المشتركة. يرجى إرجاع نسخة واحدة مختومة كما وردت إلى عنايتي في مغلف ذاتي المغلف مختومة.
انتهاء صلاحية الخيار.
إذا تركت الشركة، سيكون لديك عادة 90 يوما لممارسة الخيار الخاص بك عن أي الأسهم التي تعود (اعتبارا من اليوم الأخير من الخدمة). لا يجوز لك شراء أسهم غير مكتسبة بعد انتهاء خدمتك. إذا فشلت في ممارسة الخيار الخاص بك في غضون 90 يوما بعد انتهاء الخدمة، سوف ينتهي الخيار الخاص بك، وأنك لن تكون قادرة على شراء أي أسهم تحت هذا الخيار. بالإضافة إلى ذلك، إذا لم تنته صلاحية أخرى من خلال إنهاء عملك، تنتهي خيارات الأسهم الخاصة بك بعد 10 سنوات من إصدارها.
أسعار ممارسة والتقييمات 409A.
وبصفة عامة، فإن سعر ممارسة الخيارات الممنوحة بموجب خطة حقوق الملكية لعام 2015 سيكون بالقيمة السوقية العادلة لهذه الأسهم العادية في تاريخ المنح. وباختصار، فإن القيمة السوقية لЂњЂњairairЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќЂќ،،،،،،،،،،،،،،،،،،،،،،،،،،،،،،،،،،،،، is is is is is is is is is is is is is is is is is is is is is is is is is................................... ومن أجل مساعدة المجلس، تحتفظ الشركة بمستشارين خارجيين للقيام بشيء يسمى تقييم Ђњ409A Ђќ. وبوجه عام، كلما كان تقييم األسهم أفضل كلما كان هناك المزيد من الفرص لتحقيق الربح. بالإضافة إلى ذلك، انخفاض سعر ممارسة يقلل من النقد اللازم لممارسة الأسهم وتأسيس فترة القابضة التي يمكن أن يكون لها مزايا ضريبية في بعض البلدان. نحن تصف تلك هنا ولكن كما هو الحال دائما تحقق مع المستشار المالي أو الضريبي قبل اتخاذ أي إجراء.
قانون الضرائب معقد ويجب عليك استشارة المحامي الضريبي أو مستشار الضرائب الأخرى الذي هو على دراية خيارات الأسهم بدء التشغيل قبل اتخاذ أي قرارات.
بالنسبة للموظفين الأمريكيين مع خيارات الأسهم الحوافز (إيسوس)، يتم فرض ضريبة عليك عند ممارسة الخيارات الخاصة بك. تستحق الضريبة على الربح أو الربح الذي تجنيه عند بيع السهم (الفرق بين سعر التمرين وسعر البيع). واعتمادا على فترة الحيازة الخاصة بك، يمكن معاملة الضريبة كدخل عادي أو مكسب رأسمالي. ومع ذلك، يرجى ملاحظة أن أي مكسب عند ممارسة إسو (الفرق بين سعر الممارسة والقيمة السوقية العادلة في تاريخ ممارسة)، حتى لو كنت لا تبيع الأسهم، ويمكن اعتبار "تفضيل الضريبة" نحو البديل الحد الأدنى للضريبة. يجب عليك الاتصال بمستشار الضرائب لمعرفة ما إذا كان هذا ينطبق عليك.
بالإضافة إلى فوائد فترة الاحتفاظ الطويلة، مصلحة الضرائب لديها فائدة إضافية لحاملي الأسهم المؤهلة الأعمال الصغيرة (قسبس قصيرة). حاليا، جيتلاب يلبي معايير العلاج قسبس ومع ذلك، مرة أخرى الشركة ليست في وضع يمكنها من تقديم الضرائب أو المشورة القانونية لذلك تحقق مع المستشارين الضريبية والمالية الخاصة بك. لقد وجدنا أن هذه المقالة مفيدة في وصف برنامج قسس بمزيد من التفصيل.
عموما، بالنسبة لخيارات الأسهم غير المؤهلة (نسو)، يتم فرض ضرائب عليك على أي مكسب عند ممارسة مكتب الإحصاء الوطني (الفرق بين سعر التمرين والقيمة السوقية العادلة في تاريخ التمرين). يتم التعامل مع مكاتب الإحصاء الوطنية بشكل أقل إيجابية بموجب قانون الضرائب لأنها يمكن أن تعطى للأشخاص الذين لا يعملون في جيتلاب. وهذا يعقد القانون الضريبي ويتجاوز النطاق الحالي لهذه الوثيقة.
وبالنسبة لموظفينا العاملين في هولندا، فإن لسلطة الضرائب الهولندية مفهوم مماثل حيث أن الفرق بين سعر التمرين والقيمة السوقية العادلة يعتبر خاضع للضريبة فقط. لذلك إذا كنت تمارس في وقت مبكر ليس هناك فرق بين الاثنين، وبالتالي لا ربح خاضع للضريبة. فيما يتعلق بالإبلاغ الضريبي، يمكنك الإبلاغ عن الفرق بين القيمة السوقية العادلة في الممارسة وسعر الممارسة. حتى إذا لم يكن هناك فرق بين الاثنين، لا شيء يحتاج إلى الإبلاغ عنها. مرة واحدة كنت قد تمارس الخيارات، ثم سوف تحتاج إلى التحدث مع المستشار الضريبي الخاص بك حول كيفية الإبلاغ عنها لأغراض ضريبة الثروة الهولندية. ومرة أخرى، فإن الشركة ليست في وضع يمكنها من تقديم المشورة الضريبية أو القانونية حول التدريب المبكر أو التقارير الضريبية، لذلك تحقق مع المستشارين الضريبية والمالية الخاصة بك.
أي شخص هو دائما موضع ترحيب لطرح لدينا كفو أي أسئلة لديهم حول خياراتهم، جمع التبرعات GitLab†™، أو أي شيء آخر يتعلق الإنصاف في جيتلاب. ومع ذلك، يجب على الجميع أيضا استشارة محام قبل اتخاذ القرارات المالية الهامة، وخاصة فيما يتعلق بإنصافهم لأن هناك متطلبات قانونية وضريبية معقدة قد تنطبق.
المراجع.
كتب عضو فريقنا درو بليسينغ عن ما تعلمه عن خيارات الأسهم بعد البدء في البحث عنها لأنه حصل عليها عند الانضمام إلينا. مقالته هو موضع تقدير كبير ولكن جيتلاب شركة لا تؤيد ذلك، أي المشورة هو له.

خيارات الأسهم جيثوب
سحب طلبات 0.
تاريخ جيثب اليوم.
جيثب هي موطن لأكثر من 20 مليون مطورين يعملون معا لاستضافة ومراجعة التعليمات البرمجية، وإدارة المشاريع، وبناء البرمجيات معا.
استنساخ مع هتبس.
استخدام جيت أو الخروج مع سفن باستخدام ورل على شبكة الإنترنت.
أنا لست محاسب. ولعل الناس الذين ساهموا في هذه الوثيقة ليسوا محاسبين. هذه الوثيقة ليست نصيحة ضريبية. هذه الوثيقة لا تأخذ بعين الاعتبار الظروف الفردية الخاصة بك. إذا قرأت هذا المستند، فإنك توافق على أنك لن تحملني أية مسؤولية عن أية أضرار تتكبدها أية إجراءات اتخذتها كنتيجة لقراءة هذا المستند.
يتم توفير هذه الوثيقة على أساس "كما هي"، دون أية ضمانات أو شروط من أي نوع، سواء كانت صريحة أو ضمنية، بما في ذلك، على سبيل المثال لا الحصر، أي ضمانات أو شروط تيتل أو عدم الانتهاك أو ميرتشانتابيليتي أو الملاءمة لغرض معين. أنت وحدك المسؤول عن تحديد مدى ملاءمة استخدام أو إعادة توزيع هذه الوثيقة وتتحمل أي مخاطر مرتبطة بقراءتها أو أخذ أي نصيحة منها.
عندما تلقيت خيارات الأسهم من شركة، وجدت أنه من الصعب بشكل لا يصدق لفهم ما هي التزاماتي الضريبية. يصف الموقع أتو القواعد الضريبية للأسهم وخيارات الأسهم في شروط المحاسبة العامة بشكل لا يصدق. على وجه الخصوص، كان هناك القليل جدا من التداخل المستخدم بين المصطلحات المكتوبة في وثيقة مخطط مشاركة الموظفين التي قدمتها شركتي، والبنود على موقع أتو. هذه الوثيقة هي محاولة من قبل لي للتعبير عن تفسير بلدي في سهل الإنجليزية من قوانين الضرائب الأسترالية لأنها تنطبق على خطط الموظفين المشتركة التي تقدمها الشركات الناشئة التكنولوجيا النموذجية. ويهدف إلى أن يكون العمل التعاوني، استضافت على جيثب، ويمكن تقديم المساهمات إما عن طريق رفع القضايا، أو عن طريق تقديم طلبات السحب.
وهو أيضا محاولة لي للتحقق من صحة تفسيري للقوانين الضريبية ضد الفهم المشترك لكل من يقرأ هذه الوثيقة. في هذا السياق، هناك أخطاء على الأرجح (ربما بعض كبيرة) التي قمت بها، لذلك إذا كنت تعتقد أنني مخطئ في أي شيء، يرجى رفع قضية أو تقديم طلب سحب.
أولا وقبل كل شيء، المقصود من هذه الوثيقة لنفسي (جيمس روبر) لتوضيح فهمي للقوانين الضريبية الأسترالية فيما يتعلق خطط مشاركة الموظفين التي أنا جزء منها.
ثانيا، هذه الوثيقة موجهة للأشخاص الذين هم في وضع مماثل بالنسبة لي. وهذا يعني أنهم مقيمون أستراليون يجب عليهم دفع الضرائب في أستراليا، ويعملون من أجل شركة ناشئة، وقد تلقوا أسهما أو خيارات أسهم من شركتهم. ويهدف إلى تعريفهم ببعض القواعد والمصطلحات والتعقيد في قانون الضرائب الأسترالي فيما يتعلق بخيارات الأسهم. انها ليست المشورة الضريبية. انظر المحاسب الخاص بك.
ثالثا، هذه الوثيقة موجهة إلى مكتب الضرائب. إن وجود هذه الوثيقة هو مؤشر على أن تفسيرا لموقع أتو لقانون الضرائب الأسترالي لمخططات الأسهم غير موجود عندما يتعلق الأمر بتطبيقه على مشاركة المخططات التي تعطى عادة لموظفي الشركات الناشئة التقنية. قد تكون الصياغة المستخدمة في هذه الوثيقة مفيدة كبداية لتحسين المحتوى على الموقع أتو في مثل هذه الطريقة أن المشاركين في برامج مشاركة الموظف بدء التكنولوجيا سوف تكون قادرة على ربط بسهولة ل.
وبطبيعة الحال، فإن كل برنامج مشاركة الموظفين يختلف. ومع ذلك، فإن خطط مشاركة الموظفين التي تقدمها الشركات الناشئة التقنية عادة ما تكون مشابهة جدا من منظور الضرائب. هذا صحيح بشكل خاص إذا كان برنامج مشاركة الموظفين الخاص بك هو بدء التشغيل في وادي السيليكون مقرها، في سيليكون فالي خطط مشاركة الموظفين هي شائعة جدا ورخيصة جدا لاقامة التي عادة ما يكون مجرد قالب أن الشركة يملأ بها، وهذا كل ما تحتاجه. بالنسبة للشركات الأسترالية، والأشياء هي (على ما يبدو) أصعب بكثير وأكثر بكثير تكلفة، ولكن مع ذلك القصد هو نفسه.
لذلك قد تبدو خطة مشاركة الموظفين النموذجية كما يلي:
يتم منحك عددا من الخيارات بسعر الإضراب. قد تضطر إلى دفع سعر أولي صغير جدا (أقل بكثير من سعر الإضراب) لشراء الخيارات، أو قد تكون قد أعطيت لك مجانا. وتستفيد الخيارات على مدى فترة من الزمن، وعادة 4 سنوات. 25٪ سترة بعد السنة الأولى، وبعد ذلك تدريجيا إما كل شهر أو كل ربع بعد أن كمية صغيرة سترات حتى يكون لديهم جميع المكتسبة. يجوز لك ممارسة أي جزء مكتسب من الأسهم في أي وقت. ممارسة وسائل لشراء الأسهم بسعر الإضراب. إذا تركت الشركة قبل 4 سنوات، فإنك تفقد أي أسهم غير مكتسبة. الجزء المكتسب الذي قد تمارسه خلال فترة زمنية معينة، على سبيل المثال، 90 يوما، وإلا فإنك تخسرها أيضا. في مرحلة ما في المستقبل، ربما بعد 7 سنوات، فإن الخيارات تنتهي وسوف تفقد لهم إذا كنت لم تمارس لهم بحلول ذلك التاريخ.
هناك بعض الجوانب الأخرى من برنامج مشاركة الموظفين نموذجية المقدمة في الشركات الناشئة التكنولوجيا التي قد لا تكون مثيرة للاهتمام بالنسبة لك، ولكنها مهمة في مجالات معينة من قانون الضرائب، إذا كان أي من هذه النقاط لا تصدق، ثم أجزاء من هذا قد لا تنطبق الوثيقة عليك:
الخيارات / الأسهم هي الأسهم العادية. هذا يطرح السؤال، ما هي حصة غير عادية؟ أكثر الأسهم غير العادية في الشركات الناشئة هي أسهم تفضيلية. وتعني الأسهم التفضيلية عند بيع الشركة، ويحصل أصحاب الأسهم التفضيلية على أول قطعة من الكعكة، وعادة ما تكون قيمة ما استثمروه. انها بوليصة تأمين، إذا كانت الشركة سيئة، فإنها على الأقل الحصول على ما وضعوا في الوراء قبل أي شخص آخر يجعل المال. وعادة ما تعطى هذه الأنواع من الأسهم لأصحاب رؤوس أموال المخاطر عندما يستثمرون في الشركة الناشئة. فهي لا تعطى أبدا للموظفين. هناك عدد قليل من أنواع أخرى من الأسهم، ولكن في نظام مشاركة الموظفين نموذجية في الشركات الناشئة التكنولوجيا، وأسهم عادية. خياراتك / أسهمك ليست أكثر من 5٪ من الشركة أو أكثر من 5٪ من حقوق التصويت. إلا إذا كنت مؤسسا لشركتك، من المحتمل أن تعطيك خياراتك سوى جزء صغير من النسبة المئوية للشركة. يتم منح نظام الأسهم إلى 75٪ على الأقل من الموظفين المقيمين الأستراليين في الشركة. وسيكون هذا هو الحال في بدء تشغيل التكنولوجيا النموذجية.
وقد تم تغيير قانون الضرائب الأسترالي في عام 2009، علما بأن هذه الوثيقة لا تتحدث إلا عن الأسهم التي تتلقاها بعد تغيير القوانين.
عندما يتعلق الأمر فرض الضرائب على خيارات الأسهم، واحدة من أهم الشروط التي سوف تواجهها هو الخصم. الخصم هو الفرق بين سعر الإضراب، وقيمة السهم. هو على نحو فعال الخصم الذي تتلقاه عند شراء الأسهم، التي لم تكن قد حصلت على خلاف ذلك إذا لم يكن لديك خيار الأسهم التي تمكنك من شرائه في ذلك السعر الإضراب أقل.
وهناك مصطلح هام آخر هو القيمة السوقية العادلة. وبما أن الشركة التي تعمل عليها هي شركة ناشئة، فإن قيمة السهم ليست مباشرة على قدم وساق بمجرد النظر إلى السعر في سوق الأسهم، حيث أن شركتكم لم تدرج بعد في سوق الأسهم. ومع ذلك، فالأسهم لها قيمة، وفي هذه المرحلة من عدم إدراجها، فإن هذه القيمة هي القيمة السوقية العادلة.
في خطة حصة نموذجية، يمكنك أن تسأل شركتك ما هي القيمة السوقية العادلة للسهم في أي وقت (أو الحصول على جدول لجميع أسعار حصة مع مرور الوقت)، وأنها سوف تعطيه لك.
في أستراليا، هناك هذه القاعدة الغريبة حول خصم الأرباح الرأسمالية. هذه القاعدة ذات صلة بشكل لا يصدق لمشاريع مشاركة الموظفين، لذلك يجب أن نوضح ذلك هنا.
عندما تحصل على دخل من صاحب العمل، فإن هذا الدخل يحسب إلى إجمالي الدخل الخاضع للضريبة، ومن ثم تدفع الضرائب على ذلك، مثل العادية. عندما تحقق ربحا من بيع أصل ما (على سبيل المثال، عقار استثماري أو أسهم)، وهذا ما يسمى المكاسب الرأسمالية، ويحسب هذا الربح إلى إجمالي الدخل الخاضع للضريبة، ثم تدفع ضريبة على ذلك، مثل العادية. إلا إذا كنت تملك الأصول لأكثر من عام (غالبا ما تسمع المحاسبين يقول "سنة ويوم")، ثم يمكنك تقسيم مكاسب رأس المال من قبل اثنين قبل إضافته إلى إجمالي الدخل الخاضع للضريبة. وبالتالي فإنك في نهاية المطاف دفع ما لا يقل عن نصف الضرائب على أرباح رأس المال على الأقل. وهذا ما يعرف بخصم ضريبة الأرباح الرأسمالية.
وهذا له عواقب هامة على خيارات الأسهم، لأن هو المال الذي جعل قبالة خيارات الأسهم الدخل العادي، أو هو كسب الكسب؟ إذا كان هذا الأخير، يمكنك دفع ضريبة أقل بكثير. الجواب على هذا السؤال هو حيث ينشأ الكثير من التعقيد في خيارات الأسهم.
أولا وقبل كل شيء، من المهم أن نعرف أنه إذا كان مخطط حصتك لشركة أجنبية، فإن القواعد لا تختلف عن إذا كانت لشركة أسترالية. إذا كنت مقيما أستراليا لأغراض ضريبية، فإنك تتحمل جميع الالتزامات الضريبية نفسها بغض النظر عن البلد الذي تملكه الشركة أو أسهم الأسهم. قد تتساءل عن كيفية معرفة أتو أن لديك أسهم أو خيارات الأسهم في الشركة الأجنبية، والجواب هو أنها لن إلا إذا كنت أقول لهم. ومع ذلك، إذا كانت شركتك تسير على ما يرام، ثم فجأة مليون دولار الأراضي في حسابك المصرفي الاسترالي، يمكنك الرهان سيكون لديك بعض المدققين الضرائب يطرق على الباب الخاص بك يسأل أين جاء هذا المال من.
لنبدأ بالموقف الافتراضي. يجب عليك دفع الضرائب عند منحك خيارات الأسهم. وبما أن خيار الأسهم هذا يمثل خصما على الأسهم، فإن خيار الأسهم نفسه له قيمة (مساوية للخصم)، وبالتالي فهو الدخل الذي تلقيته. لذلك، يجب عليك تضمين هذا الدخل كدخل منتظم (وليس مكسب رأس المال) في الإقرار الضريبي الخاص بك، في إطار قسم لمشاركة الموظفين الخطط.
ومع ذلك، ماذا لو تركت الشركة في وقت مبكر؟ نظرا لأن خياراتك لم تخسب بعد، فإنك تخسر الخيارات، مما يعني أنك دفعت ضريبة على شيء لم تتلقه فعليا. ولهذا السبب، يحدد مكتب الضرائب هذه القاعدة من المخاطر الحقيقية للمصادرة. وبما أن الخيارات الخاصة بك لم تخسب، وبما أن ترك الشركة سوف يؤدي إلى التخلي عن الخيارات الخاصة بك، وهناك خطر حقيقي من المصادرة.
خيارات الأسهم التي يوجد فيها خطر حقيقي من المصادرة (وهناك أيضا عدد من الشروط الأخرى التي لن نذهب إلى هنا) يتم احتسابها كخيارات مؤجلة الضرائب، وهذا يعني أنه يجب عليك (وهذا شيء أنا لست واضحا على ، ما إذا كان هذا لا بد منه أو ما إذا كان لديك خيار) تأجيل يعلن لهم حتى شروط معينة صحيحة. شرط واحد هو أن تتوقف عن العمل. نظرا لأنك تفقد خیاراتك غیر المستثمرة عند التوقف عن العمل علی أي حال، فإن ھذا الشرط غیر ملائم. شرط آخر هو إذا لم يعد الأسهم لديها خطر حقيقي من المصادرة. يحدث هذا عند استحقاقها.
لذا، من أجل خطة نموذجية للموظفين بدء التشغيل التكنولوجيا، عليك أن تدفع الضرائب على الخيارات التي تتلقاها عند استحقاقها.
السؤال في الواقع ليس كم من الضرائب التي تدفع، ولكن كم الدخل الذي تعلن. عندما سترة الأسهم الخيارات الخاصة بك، كنت تأخذ القيمة السوقية العادلة في الوقت الذي الخيار المستحق، طرح سعر الإضراب، والآن لديك الخصم. إذا كنت دفعت السعر الأولي لشراء الخيار، طرح هذا من الخصم، لأن هذا كان جزءا من تكلفة الحصول على الخصم وحتى يعوض الخصم، وإلا، تأخذ الخصم كما هو. ثم تضاعف ذلك بمقدار الخيارات التي تم تعيينها في ذلك الوقت. الآن لديك مبلغ الدخل لديك للإعلان.
إذا كانت هناك عدة مرات الخيارات المتاحة خلال السنة (ربما كانت هناك، منذ أن كانت تدار شهريا أو ربع سنوي)، فإنك تحتاج إلى القيام بذلك الحساب لكل شهر / ربع سنة، وأن الخيارات المخولة، باستخدام القيمة السوقية العادلة في ذلك الشهر بالذات أو الربع.
لاحظ أن هذا الخصم هو الدخل العادي. وهي غير مؤهلة للحصول على خصم ضريبة الأرباح الرأسمالية.
وبطبيعة الحال، فإن الضريبة التي تدفعها عندما يكون الخيار قد اكتسب ليست المرة الوحيدة التي سوف تدفع الضرائب على الأسهم. في مرحلة ما في المستقبل، يمكنك ممارسة الخيارات الخاصة بك، وعند هذه النقطة، أو بعض نقطة لاحقة، يمكنك بيع الأسهم. عندما يحدث ذلك، سوف تحتاج إلى دفع ضريبة على الربح من القيمة السوقية العادلة في الوقت الذي يؤهل، وهذا هو مكسب رأس المال. لاحظ أن قاعدة التكلفة للربح هنا ليست سعر الإضراب، ولكن القيمة السوقية العادلة عندما يكون الخيار مستحق. كنت قد دفعت بالفعل ضريبة على المكاسب من سعر الإضراب إلى القيمة السوقية العادلة عند استحقاقها، لا تحتاج لدفع الضرائب مرتين على هذا المكسب.
إذا احتفظت بالسهم لأكثر من سنة، أي إذا كانت الفترة الزمنية بين ممارسة الخيار ثم بيع الحصة أكثر من سنة (هل هذا صحيح أم أنه من تاريخ استحقاق الخيار) ثم سوف تكون مؤهلة للحصول على خصم الأرباح الرأسمالية 50٪، وهكذا عليك فقط لحساب نصف مكاسب رأس المال نحو الدخل الخاضع للضريبة الخاص بك. وإلا عليك أن تحسب مكاسب رأس المال الكاملة نحو الدخل الخاضع للضريبة.
يمكنك أن ترى هنا أن توقيت المسائل. يمكنك توفير الكثير من المال في الضرائب إذا كنت تمارس الخيارات الخاصة بك في السنة قبل كنت تنوي بيعها. لهذا السبب، قد تقرر ممارسة الخيارات الخاصة بك في وقت مبكر، قبل أن يكون لديك أي فرصة لبيعها. قد تقرر ممارسة الخيارات الخاصة بك بمجرد أنها سترة، فقط في حالة حدث السيولة يأتي الذي يسمح لك لبيع الأسهم الخاصة بك / الخيارات المكتسبة، بحيث يمكنك المطالبة الخصم. من الواضح أننا على الرغم من أننا الآن تتحرك في المخاطر القياسية من تداول الأسهم، إذا كنت تمارس أسهمك في وقت مبكر، وتذهب الشركة كسر، ثم عليك أن تخسر المال.
وفي بعض الأحيان يكون التاريخ المكتسب، وتاريخ التمرين، وتاريخ بيعها، متماثلا. قد يكون هذا هو الحال إذا كانت الشركة مدرجة بالفعل وقمت ببيع الأسهم عند استحقاقها، أو ربما تم الحصول على الشركة وكان هناك شرط في نظام حصتك الذي تسبب في جميع الخيارات الخاصة بك للحصول على مرة واحدة في ذلك الحدث حتى تتمكن من بيعها. في هذه الحالة، تكون القيمة السوقية عندما تكون خياراتك هي السعر الذي تبيعه مقابلها، وبالتالي فإن المكسب الكامل من سعر الإضراب إلى سعر البيع (مطروحا منه سعر الشراء الأولي للخيارات إذا كان هناك خيار واحد) يعتبر دخلا منتظما - لا يوجد مكسب رأس المال، وحتى لا خصم ضريبة الأرباح الرأسمالية.
إذا كانت بعض الخيارات الخاصة بك قد اكتسبت، ودفعت ضريبة عليهم، ولكن بعد ذلك يذهب الشركة كسر، أو إذا لسبب ما كنت قررت عدم ممارسة الخيارات الخاصة بك وكنت مصادرة لهم، ثم كنت قد جعلت خسارة على تلك الخيارات. الخصم الذي كنت أعلن مرة واحدة كدخل، يمكنك الآن تعلن خسارة رأس المال. لاحظ أن ما كنت تعلن هنا هو الخصم الكامل. إذا كان هناك سعر شراء أولي للخيارات، لا تطرح ذلك من الخصم عند المطالبة بالخصم كخسارة رأسمالية.
تلقت أليس 1600 خيارات في 1 يناير 2011 بسعر الإضراب 0.10 $. 25٪ من الخيارات المخولة في السنة الأولى، ثم كل ربع سنة بعد أن 1/16 من الخيارات المتبقية. في 1 نوفمبر 2014، تسرد الشركة في سوق الأسهم. في 1 يناير 2015، وقالت انها تمارس جميع الخيارات لها، وبعد ذلك في 2 يناير 2016، وقالت انها تبيع لهم مقابل 2.00 $ للسهم.
كانت لدى شركة أليس القيم السوقية العادلة التالية في مرحلة ما قبل الاكتتاب العام:
1 يناير 2012: 0.20 $ 3 يونيو 2012: $ 0.25 14 مارس 2013: 0.40 $ 25 نوفمبر 2013: 0.55 $ 12 أبريل 2014: 0.70 $.
في 1 يناير 2015، كان سعر السهم 1.50 $.
تعلن أليس الدخل التالي:
من المهم أن نلاحظ هنا أن المكاسب المذكورة أعلاه ليست هي نفسها النقدية في متناول أن تلقت أليس - دفعت أليس $ 160 لممارسة خياراتها، وبيعها في $ 3200، وهذا يعني انها جعلت 3040 $. إذا قمت بإضافة مكاسب الخصم غت قبل من كل عام أن أعلنت، فإنها سوف مجموع 3040 $. حتى أنها أعلنت كل الأموال التي قدمتها، ما يجعل من التعقيد هو أن جزءا فقط من تلك الأموال التي تم الإعلان عنها في السنة التي جعلت ذلك، وأعلن أجزاء أخرى في السنوات السابقة والخيارات المكتسبة.
إذا أعطيت أسهم عادية، على سبيل المكافأة، وهذه الأسهم ليس لها فترة استحقاق ودون أي تكلفة عليك، ثم عليك أن تدفع الضرائب على هذه الأسهم، حتى لو كانت مقيدة بطريقة ما (أي، حتى لو كنت لا يمكن بيعها الآن). وتعلن القيمة السوقية العادلة مضروبا في عدد الأسهم المقدمة لك كدخل منتظم، وليس ككسب أسبي. عند بيع هذه الأسهم، طرح القيمة السوقية العادلة في الوقت الذي أعطيت لك فيه، ويعتبر هذا الرقم المكسب الرأسمالي. ثم يتم إضافة هذا المبلغ إلى الدخل الخاضع للضريبة الخاص بك، وتطبيق خصم الأرباح الرأسمالية إذا كانت الأسهم محتفظ بها لأكثر من عام.
وأتمنى أن يكون في مكان ما على موقع أتو كلمة "سترة" وكلمة "الضرائب المؤجلة" مرتبطة. القاعدة بسيطة: يتم تأجيل الضريبة إلى أن تستفيد الخيارات. ولكن لفهم ذلك، يجب أن تقرأ من خلال عدة صفحات من المعلومات والأمثلة. في نهاية المطاف، كنت تتعثر عبر هذه الصفحة، حيث يتم استخدام مصطلح سترة. But even then there it's not clear that each month, the vested portion is no longer deferrable and must be declared, the wording makes it seem to me that if any part is still unvested, the whole lot can be deferred. Most of the examples on the ATO website talk about a share price as if the shares are traded on the stock market. But this is never the case for tech startups. Examples that describe startup situations are sorely needed. Most tech startup employee share schemes use the term "fair market value", while the ATO website uses the term "market value". It would be very useful if the website says "for companies that are not publicly traded, the market value is often referred to as the fair market value. For most startups, employees and ex employees can ask what the fair market value was at any time from their employer. If you don't know that, the ATO website makes it seem like it's this mystical number that it's up to you to use some unpublished methodology to determine, see this page. It should be stated that employees can usually obtain this from their employer. Since there is such thing as a typical employee share scheme for tech startups, and since this is becoming more and more common, the ATO should publish a fact sheet, similar to this very document, which describes in the same terms as commonly used in employee share schemes for tech startups , what their tax obligations are.
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Github stock options

سحب طلبات 3.
تاريخ جيثب اليوم.
جيثب هي موطن لأكثر من 20 مليون مطورين يعملون معا لاستضافة ومراجعة التعليمات البرمجية، وإدارة المشاريع، وبناء البرمجيات معا.
Clone with HTTPS.
استخدام جيت أو الخروج مع سفن باستخدام ورل على شبكة الإنترنت.
Example of company valuation, shares, fundraising, and dilution (source)
If you’ve ever worked or considered working for a startup or fast-growing tech company, you probably have experienced or tried to learn about stock options, RSUs, and other types of equity compensation .
It is a confusing topic that is often not discussed clearly. This is unfortunate because it makes it harder to make good decisions. Many people learn the basic ideas through experience or reading, but equity compensation is a complicated and difficult area usually only thoroughly understood by professionals. Sadly, both companies and employees are routinely hurt by costly mistakes which might otherwise be avoidable.
This guide aims to improve that situation. It does not presume you have a law degree or MBA. The material is dense, but we endeavor to present it in a way that is understandable to lawyers and non-lawyers alike.
Think of the guide as a small book, not a blog. We suggest you star and refer to it in the future. An hour or two reading the material here and the linked resources could ultimately be among the most financially valuable ways you could spend that time.
This document and the discussion around it are not legal or tax advice. Talk to a professional if you need advice about your particular situation. See the full disclaimer below.
If you’re thinking of working for a company that is offering you equity, it is critical to understand both the basics and some very technical details about the exact type of compensation you are being offered, including the tax consequences. Equity compensation and tax might seem like different topics, but they are so intertwined it's hard to explain one without the other. An understanding of the underlying rules is necessary for negotiating fair offers — on both sides.
Of course, this guide can’t replace professional advice. But ask anyone who’s worked in startups and they’ll have stories of how they or their colleagues made costly mistakes as a result of not understanding the details. Assessing the advice you receive from your personal or company attorney can be easier when you have all the information to work with.
This guide applies to C corporations in the United States . It is geared towards employees, advisors, and independent contractors who want to know how stock and stock options in C corporations work. This includes most startups. Typically startups and major companies are C corporations, and not LLCs or S corporations. LLC equity compensation is different and not covered in this guide (yet). It may also be useful for founders or hiring managers, who need to talk about equity compensation with employees or potential hires, or anyone curious to learn about these topics. The aim is to be as helpful for the absolute beginner as it is for those with more experience.
We keep this brief, so you can skim and return to it easily. Sections are organized into individual points, so it’s easier to read, refer back to, contribute to, and correct. We link liberally, so we can define terms, include curated articles that have a lot more detail, and give credit where it is due.
🔹 Important or often overlooked tip ❗ “Serious” gotcha where risks or costs are significant 🔸 A gotcha or limitation to be aware of 🌪 Controversial topic where informed opinion varies significantly ☝️ Common confusion or misunderstanding, such as confusing terminology 📥 PDF or form or download.
This is an open guide . It’s open to contributions , so unlike a blog, it is living, and can be improved. While a lot of information on this topic is just a Google search away, it is scattered about. Many blogs and articles focus only on a narrow topic, are getting older, or are on sites supported by ads or other products. It should be possible to assemble this information sensibly, for free. This document was started by Joshua Levy and Joe Wallin. It’s a preliminary version, and no doubt has some errors and shortcomings, but we want to see it evolve.
If you have a question that is not answered here, please ask it here. It will help us improve the guide, and we’ll let you know if we have an answer. Even better is to file issues or PRs . We gladly credit all contributors.
This section covers the fundamental concepts and terminology around stock, stock options, and equity compensation.
Your compensation is everything you get for working for a company. When you negotiate compensation with a company, the elements to think about are cash (salary and bonus), benefits (health insurance, retirement, other perks), and equity (what we discuss here). Equity compensation refers to owning stock or having the right to buy stock in a company. In general, this guide is focused on equity compensation in corporations, not limited liability companies. The reasons for this are: (i) corporations are the most common form of startup company in the U. S. (LLCs are rarely used as the choice of entity for technology startups), and (ii) equity compensation for limited liability companies is dramatically different from equity compensation in corporations. Equity compensation is commonly used for founders, executives, employees, contractors, advisors, directors, and others. The purpose of equity compensation is twofold: To attract the best talent; and To align incentives between individuals and the interests of the company. Equity compensation generally consists of stock or stock options or restricted stock units (RSUs) in the company. We’ll define these concepts next.
Stock represents ownership of the company, and is measured in shares . Founders, investors, employees, board members, and others like contractors or advisors may all have stock. Stock in private companies frequently cannot be sold and may need to be held indefinitely, or at least until the company is sold. In public companies , people can buy and sell stock on exchanges, but in private companies like startups, usually you can’t buy and sell stock easily. Public and some private companies can pay dividends to shareholders, but this is not common among technology startups. The total number of outstanding shares reflects how many shares are currently held by all shareholders. This number starts at an essentially arbitrary value (such as 10 million) and thereafter will increase as new shares are issued. It may increase or decrease for other reasons, too, such as stock splits and share buy back. If you have stock, what ultimately determines its value is percentage ownership of the entire company, not the absolute number of shares. To determine the percentage of the company a certain number of shares represent, divide it by the number of outstanding shares. ☝️ 🔹 However, there are subtleties to be aware of regarding what this outstanding total refers to: Private companies always have what is referred to as “authorized but unissued” shares. For example, a corporation might have 100 million authorized shares, but will only have actually issued 10 million shares. In this example, the corporation would have 90 million authorized but unissued shares. When you are trying to determine what percentage a number of shares represents, you do not make reference to the authorized but unissued shares. You actually want to know the total issued, but even this number can be confusing, as it can be computed more than one way. Typically, people refer to the total number of shares “issued and outstanding” or “fully diluted.” “Issued and outstanding” refers to the number of shares actually issued by the company to shareholders. Note this will not include shares that others may have an option to purchase. “Fully diluted” refers to all of the shares that have been issued, all of the shares that have been set aside in a stock incentive plan, and all of the shares that could be issued if all convertible securities (such as outstanding warrants) were exercised. A key difference is that this total will include all the shares in the employee option pool that are reserved but not yet issued to employees. (The option pool is discussed more below.) Generally, it’s best to know the fully diluted number to know the likely percentage a number of shares is worth in the future. The terminology mentioned here isn’t universally applied, either, so it’s worth discussing it to be sure there is no miscommunication.
It is hard to value private company stock. A stock certificate is a piece of paper that entitles you to something of highly uncertain value, and could well be worthless in the future, or highly valuable, depending on the fate of the company. 🔸 Generally, selling stock in a private company may be difficult, as the company is not listed on exchanges, and in any case, there may be restrictions on the stock imposed by the company. In startups, it is typical to hold the stock until the company is sold or becomes public in an IPO . A sale or IPO is often called an exit . Sales, dissolutions, and bankruptcy are sometimes called liquidations . 🔹 Private sales: In a few cases, you may be able to sell private company stock to another private party, such as an accredited investor who wants to become an investor in the company, but this is fairly rare. This is often called the secondary market . Sales generally require the agreement and cooperation of the company. For example, typically your shares would be subject to a right of first refusal in favor of the company (meaning, you couldn’t sell your shares to a third party without offering to sell it to the company first). Another possible roadblock is that private buyers may want the company's internal financials to establish the value of the stock, and this typically requires the cooperation of the company. There have been some efforts such as SharesPost, Equidate, and EquityZen to establish a market around such sales, particularly for well-known pre-IPO companies, but it’s still not a routine practice. Quora has more discussion on this topic.
Stock comes in two main types, common stock and preferred stock . You’ll also hear the term founders’ stock , which is (usually) common stock allocated at a company’s formation. It’s complicated, but in general preferred stock is stock that has rights, preferences, and privileges that common stock does not have. For example, preferred stock usually has a liquidation preference , which gives the preferred stock owner the right to be paid before the common stock owners upon liquidation. Liquidation overhang refers to how much liquidation preference is ahead of the common stock. For example, if the company has received hundreds of millions of dollars in investments from investors, the common stock will not be worth anything on a sale unless the sale price exceeds the liquidation overhang. Generally employees and service providers receive common stock or options to purchase common stock in return for their service, and investors receive preferred stock.
Stock options (more specifically, “employee stock options” when given to employees) are contracts that allow you to buy shares, which is called exercising the options. Options are not the same as stock; they are only the right to buy stock upon and subject to the conditions specified in the option agreement. Stock options allow you to buy shares at a fixed price per share, the strike price . The strike price is generally set lower (often much lower) than what people expect will be the future value of the stock, which means you can make money when you sell the stock. Options expire. You need to know how long the exercise window will be open. Options are only exercisable for a fixed period of time, typically seven to ten years as long as you are working for the company. ❗ Importantly, they also expire when you quit working for the company (e. g., 90 days after termination of service) — so can effectively be worthless if you cannot exercise them before you leave. 🔹 Recently (since around 2015) a few companies are finding ways to keep the exercise window open for years after leaving a company, and promote this as fairer to employees. See this list, which includes Amplitude, Clef, Coinbase, Pinterest, and Quora. 🔸 Vesting: Stock and stock options may be granted to you, but they come with a variety of conditions and limitations. One of the most significant conditions is that you usually “earn” rights to the shares or options over time or under certain events. This is called vesting . Vesting usually occurs according to a vesting schedule . You vest only while you work for the company. For example, it is very common to have stock or options vest over a period of four years, a bit at a time, where none of it is vested at first, and all of it is vested after four years. Vesting schedules can also have a cliff , where until you work for a given amount of time, you are 0% vested. For example, if your equity award had a one-year cliff and you only worked for the company for 11 months, you would not get anything, since you not have vested in any part of your award. Similarly, if the company is sold within a year, depending on what your paperwork says, you may also receive nothing on the sale of the company. A very common vesting schedule is vesting over 4 years, with a 1 year cliff. This means you get 0% vesting for the first 12 months, 25% vesting at the 12th month, and 1/48th (2.08%) more vesting each month until the 48th month. For example, if you leave just before a year is up, you get nothing, but if you leave after 3 years, you get 75%. Vesting might also occur in certain situations. You may have acceleration , where vesting is triggered if a company is sold ( single trigger ) or if it’s sold and you’re fired ( double trigger ). This is common for founders and not so common for employees. Grants for advisors typically vest over a shorter period than employee grants, often two years. Advisor grants also typically have a longer exercise window post termination of service. Typical terms for advisors, including equity levels, are available from the Founder Institute’s 📥 Founder/Advisor Standard Template (FAST).
Restricted stock units (RSUs) are a different type of compensation. RSUs are an agreement by the company to issue you shares of stock or the cash value of shares of stock on a future date. Each unit represents one share of stock or the cash value of one share of stock that you will receive in the future. The date on which you receive the shares or cash payment is the settlement date . 🔸 They may vest according to a vesting schedule. The settlement date may be the time-based vesting date or a later date based on, for instance, the date of a company's IPO. RSUs are more common for larger companies and options are more common for startups. RSUs are difficult in a startup or early stage company because when the RSUs vest, the value of the shares might be significant, and taxes will be owed on the receipt of the shares. This is not a bad result when the company has sufficient capital to help the employee make the tax payments, or the company is a public company that has put in place a program for selling shares to pay the taxes. But for cash-strapped private startups, neither of these are possibilities. This is the reason most startups use stock options, not RSUs or stock bonuses or stock awards. RSUs are often considered less preferable to grantees since they remove control over when you owe tax. Options, if granted with an exercise price equal to the fair market value of the stock, are not taxed until exercise, an event under the control of the optionee. If a company awards you an RSU or restricted stock award which vests over time, you will be taxed on the vesting schedule. You have been put on “autopilot” with respect to the timing of the tax event. This can be a really bad thing if, on the date of vesting, the shares are worth a lot and consequently you owe a lot of tax. ☝️ By the way, don’t confuse “restricted stock units” with “restricted stock” , which is an entirely different thing (described next).
These are a few different types of equity awards and topics that are less common, but we mention for completeness.
“Phantom equity” is a type of compensation award that references equity, but does not entitle the recipient to actual equity in the business. These awards come under a variety of different monikers, but the key to understanding them is knowing that they are really just cash bonus plans, but the cash amounts are determined by reference to a company's stock. Phantom stock is an example. A phantom stock award would be an award where you are entitled to a payment equal to the value of a share of the company's stock, upon the occurrence of certain events. Stock Appreciation Rights are another example. An SAR gives the recipient the right to receive a payment the amount of which is calculated by reference to the appreciation in the equity of the company. Phantom equity can have significant value, but may be perceived as less valuable by workers because of the contractual nature of the promises. Phantom equity plans can be set up as purely discretionary bonus plans, which is less attractive than owning a piece of something. Warrants are another kind of option to purchase stock. As an employee or advisor, you may not encounter them, but it’s worth knowing they exist. They are generally used in investment transactions (for example, in a convertible note offering, investors may also get a warrant; or a law firm may ask for one in exchange for vendor financing). They differ from stock options in that they are more abbreviated and stand-alone legal documents, not granted pursuant to a “plan.” Also, because they are usually used in the investment context, they do not typically include service-based vesting provisions or termination at end of service, and are valid for a set number of years (e. g., 10 years).
Now for the details around using stock and options for compensation.
Companies can give equity compensation as stock awards, stock options, or RSUs. While the intent of each is similar, they differ in many ways, particularly around taxation. RSUs generally don’t make sense for early stage companies. If companies do grant stock, it may be restricted stock . In this context, “restricted” refers to the fact that the stock will be subject to repurchase at the lower of fair market value or cost, which repurchase right lapses over the service-based vesting period. Typically, stock awards are limited to executives or very early hires, since once the value of the shares increases, the tax burden of receiving them can be too great for most people. Instead, it’s more common for employees to get stock options. 🔹 At some point early on, generally before the first employees are hired, stock will be allocated to a stock option pool . A typical size for this is 20% of the stock of the company, but it can be 10%, 15%, or other sizes. Once the pool is established, then the company's board of directors grants pieces of it to employees as they join the company. Often, the whole pool is never used. The size of the pool is not just about how generous the company is with employees; it is determined by complex factors between founders and investors. 🔹 Compensatory stock options come in two flavors: Incentive stock options (ISOs) (also called statutory stock options) Nonstatutory stock options (NSOs) (also called non-qualifying stock options, or NQOs) ISOs are common for employees because they have the possibility of being more favorable from a tax point of view than NSOs. They can only be granted to employees (not independent contractors or directors who are not also employees). But ISOs have a number of limitations and conditions and can also create difficult tax consequences. مزيد من المعلومات أدناه. 🔹 Sometimes, to help you lower your tax burden, the company makes it possible to early exercise (or forward exercise) stock options. This means you exercise them even before they vest: you exercise them and you become a stockholder, but the company has the right to repurchase the unvested shares (at the lower of the price you paid or the fair market value of the shares) if you quit working for the company. The company will typically repurchase the unvested shares should you leave the company before the stock you’ve purchased vests. 🔸 Stock options will expire after you leave a company (typically after 90 days ). You might early exercise, or exercise at different times during your employment, depending on how much it costs and what the tax implications are. مزيد من المعلومات أدناه. Companies may impose additional restrictions on stock that is vested. For example, your shares are very likely subject to a right of first refusal. And it can happen that companies reserve the right to repurchase vested shares in certain events.
Equity compensation awards can give rise to federal and state income taxes as well as employment taxes and Medicare surtax charges. We’ll first back up and discuss fundamentals of how different kinds of taxes are calculated.
You must pay federal, state, and in some cases, local taxes on income. State tax rates and rules vary significantly state to state. Since federal rates are much higher than state rates, you usually think of federal tax planning first. 🔹 In general, federal tax applies to many kinds of income. If you’re an employee at a startup, you need to consider four kinds of federal tax, each of which is computed differently: Ordinary income tax — the tax on your wages or salary income, as well as investment income that is “short-term” Employment taxes — Social Security and Medicare taxes that are withheld from your paycheck. The Social Security wage withholding rate is 6.2% up to the FICA wage base. The Hospital Insurance component is 1.45%, and it does not phase out above the FICA wage base. Long-term capital gains tax — taxes on investment gains that are “long-term” are taxed at a lower rate than ordinary income Alternative Minimum Tax (AMT) — an entirely different kind of tax that has separate rules and only applies in some situations Ordinary income tax applies in the situations you’re probably already familiar with, where you pay taxes on salaries or wages. Tax rates are based on filing status, i. e., if you are single, married, or support a family, and on how much you make, i. e. which income bracket you fall under. As of 2015, there are income brackets at 10% , 15% , 25% , 28% , 33% , 35% , and 39.6% marginal tax rates. Be sure you understand how these brackets work, and what bracket you’re likely to be in. ☝️ There is sometimes a misconception that if you move to a higher bracket, you’ll make less money. What actually happens is when you cross certain thresholds, each additional (marginal) dollar money you make is taxed at a higher rate, equal to the bracket you’re in. It looks roughly like this (source). Investment gains, such as buying and selling a stock, are similarly taxed at “ordinary” rates, unless they are long-term , which means you held the asset for more than a year. 📥 You also pay a number of other federal taxes (see a 2015 summary for all states), notably: 6.2% for Social Security on your first $118,500 1.45% for Medicare 0.9% Additional Medicare Tax on income over $200,000 (single) or $250,000 (married filing jointly) 3.8% Net Investment Income Tax on investment income if you make over $200,000 (single) or $250,000 (married filing jointly) Ordinary federal income tax, Social Security, and Medicare taxes are withheld from your paycheck by your employer and are called employment taxes . 🔹 Long-term capital gains are taxed at a lower rate than ordinary income tax: 0% , 15% , or 20% . This covers cases where you get dividends or sell stock after holding it a year. If you are in the middle brackets (more than about $37K and less than $413K of ordinary income), your long-term capital gains rate is 15% (more details). State long-term capital gains rates vary widely. California has the highest, at 13.3%, while other states have none. For this reason, some people even consider moving to another state if they are likely to have a windfall gain, like selling a lot of stock after an IPO. Alternative Minimum Tax (AMT) is a complex part of the federal tax code many taxpayers never worry about. Generally, you do not pay unless you have high income (>$250K) or high deductions. It also depends on the state you’re in, since your state taxes can significantly affect your deductions. Confusingly, if you are affected, AMT tax rates are usually at 26% or 28% marginal tax rate, but effectively is 35% for some ranges, meaning it is higher than ordinary income tax for some incomes and lower for others. AMT rules are so complicated you often need professional tax help if they might apply to you. The IRS’s AMT Assistant might also help. ❗ AMT is important to understand because exercising incentive stock options can trigger AMT. In some cases a lot of AMT, even when you haven’t sold the stock and have no money to pay. مزيد من المعلومات أدناه. 🔹 Section 1202 of the Internal Revenue Code provides a special tax break for qualified small business stock held for more than five years. Currently, this tax break is a 100% exclusion from income for up to $10M in gain. There are also special rules that enable you to rollover gain on qualified small business stock you have held for less than five years. Stock received on the exercise of options can qualify for the Section 1202 stock benefit.
Now we’ve covered the basic concepts of equity and taxes, here are some messy details of how they interact.
As already discussed, employees can get restricted stock, stock options, or RSUs. The tax consequences for each of these is dramatically different.
Generally, restricted stock is taxed when it vests as ordinary income. Of course, if the stock is in a startup with low value, this may not result in very much tax being owed. But if it is years later from when the stock was first granted, and the company is worth a lot, the taxes owed could be significant. 🔹 However, the Internal Revenue Code offers an alternative, called a Section 83(b) election , which is an election to be taxed on the receipt of the property, even though you might not get to keep it since it has not vested. The presumption of the tax law would normally be that you do not owe tax until property you have received vests. With a Section 83(b) election, you’re telling the IRS you want to pay taxes early, on stock that is not vested yet, instead of paying as it vests. The election can potentially reduce your tax significantly: If the shares go up in value, the taxes owed on vesting might be a lot greater than the taxes owed at the time of receipt. An 83(b) election isn’t guaranteed to reduce your taxes, of course. For example, the value of the stock may not increase. And if you leave the company before you vest, you don't get the taxes you’ve paid back. ❗ You must file the 83(b) election yourself with the IRS within 30 days of the grant or exercise, or the opportunity is irrevocably lost. 🔸 Section 83(b) elections cannot be made on the receipt of a stock option. They can only be made on the receipt of actual shares of stock. If you receive an immediately exercisable stock option (meaning, an option that is early exercisable, when it is not vested), and you exercise the option before the option vests, you can make an 83(b) election on your receipt of the shares on exercise. Section 83(b) elections do not apply to vested shares; it only applies to stock that is not yet vested. Thus, if you receive options that are not early exercisable, which you cannot exercise until vested — then an 83(b) election would not apply. 🔹 Founders and very early employees will almost always want to do an 83(b) election upon the receipt of unvested shares, since the stock value is probably low. If the value is really low, and the taxes owed are not that great, you can make the election without having to pay much tax and start your capital gains holding period on the shares.
When stock vests, or you exercise an option, the IRS will consider what the fair market value (FMV) of the stock is when determining the tax you owe. Of course, if no one is buying and selling stock, as is the case in most startups, then its value isn’t obvious. For the IRS to evaluate how much stock is worth, it uses what is known as the 409A valuation of the company. The startup pays for an appraisal that sets the 409A, typically annually or after events like fundraising. In practice, this number could be low or high. 🔹 A company wants the 409A to be low, so that employees make more off options, but not low enough the IRS won’t consider it reasonable. Typically, the 409A is much less than what investors pay for preferred stock; for example, it might be only a third of the preferred stock price.
Startups generally decide to give ISOs or NSOs depending on the legal advice they get. It’s rarely up to you which you get, so you need to know about both. There are pros and cons of each from both the recipient’s and the company’s perspective. 🔸 ISOs cannot be granted to non-employees (i. e., independent contractors). ❗ 🔹 When you owe tax: When you get stock options and are considering if and when to exercise them, you need to think about the taxes. In principle, you need to think about taxes (1) at time of grant; (2) at time of exercise; and (3) at time of sale. These events trigger ordinary tax (high), long-term capital gains (low), or AMT (possibly high) taxes in different ways for NSOs and ISOs. The taxes will depend on the gain (sometimes called spread) between the strike price and the FMV, known as the bargain element , and the gain on the sale. This isn’t the whole story, but from an employee’s point of view, the key differences are (see here, here, here, and here): Restricted stock awards : Assuming vesting, you pay full taxes early with the 83(b) or at vesting: At grant: If 83(b) election filed, ordinary tax on FMV None otherwise At vesting: None if 83(b) election filed Ordinary tax on FMV of vested portion otherwise At sale: Long-term capital gains tax on gain if held for 1 year past exercise Ordinary tax otherwise (including immediate sale) NSOs : You pay full taxes at exercise, and the sale is like any investment gain: At grant and vesting: No tax if granted at FMV At exercise: Ordinary tax on the bargain element Income and employment tax withholding on paycheck At sale: Long-term capital gains tax on gain if held for 1 year past exercise Ordinary tax otherwise (including immediate sale) ISOs: You might pay less tax at exercise, but it’s complicated: At grant and vesting: No tax if granted at FMV At exercise: AMT tax event on the bargain element; no ordinary or capital gains tax No income or employment tax withholding on paycheck At sale: Long-term capital gains if held for 1 year past exercise and 2 years past grant date Ordinary tax otherwise (including immediate sale) ❗ The AMT trap: If you have received an ISO, if you exercise it may unexpectedly trigger a big AMT bill — even before you actually make any money on a sale! To make matters worse, you probably can’t sell the stock to pay the tax bill. This infamous problem (more details) has trapped many employees and bankrupted people during past dot-com busts. Now more people know about it, but it’s still a significant obstacle to plan around. (Note that if your AMT is for events prior to 2008, you’re off the hook.) 🔹 If you are granted ISOs or NSOs at a low strike price, and the bargain element is zero, then you may be able to exercise at a reasonable price without triggering taxes at all. So assuming the company allows it, it makes sense to early exercise immediately (buying most or all of the shares, even though they’re not vested yet) and simultaneously file an 83(b) election. 🔸 ☝️ Section 83(b) elections are elections to be taxed on the receipt of property even though you might have to forfeit or give back the property to the company. You can make an election on the receipt of stock, but you cannot make the election on the receipt of an option or an RSU because options and RSUs are not considered property for purposes of Section 83(b). 🔸 🌪 ISOs are often preferred by startups as it’s supposed to be better for an employee from a tax perspective. This assumes that (1) AMT won’t be triggered and (2) you’ll get low long-term capital gains rate by holding the stock for the appropriate holding periods. However, often you either run afoul of the AMT trap, or don’t hold the stock long enough with the complicated 1 year + 2 year requirement, or the spread at exercise is zero or small, so the difference wouldn’t matter anyway. NSOs do have a slightly higher tax because of the employment taxes. Overall, it’s not clear the ISO is that much better for employees, so manypeople argue for NSOs instead. 🔸 ☝️ Even more confusingly, ISOs can make it harder to meet the long-term capital gains holding period. Many people expect early exercise together with an 83(b) election will help them hold the stock longer, to qualify for long-term capital gains. While this is true for NSOs, there is a murky part of the rules on ISOs that implies that even with an 83(b) election, the capital gain holding period does not begin until the shares actually vest. So, if you want to immediately exercise an option and file a Section 83(b) election, and you might have liquidity soon, it’s better if you can have it be an NSO.
If you are awarded RSUs, each unit represents one share of stock that you will be given when the units vest. 🔸 When you receive your shares you are taxed on their value at that time. If you are an employee, this means you have to write a check to the company to cover your income and employment tax withholding. If you receive an RSU when the stock is of little value, you cannot elect to be taxed on the value of that stock when you receive the RSU — you pay taxes at vesting time, based on the shares’ value at that time. 🔸 There is a combination of big problems for RSUs in private companies: You will owe tax when you receive the shares — even though they are illiquid. You can't minimize the impact of an increase in value of the underlying shares between the date you receive the RSU and the date it is settled. If you are an employee you will have to write a check to the company to satisfy your income and employment tax withholding. 🔸 RSUs are less attractive than options from a tax point of view because you cannot make an 83(b) election with respect to an RSU. By contrast, if you receive a stock option, as long as it is priced at fair market value, you will have no income upon receipt of the options, and your income tax and employment tax consequences will be deferred until you exercise — an event under your control for the most part. Taxation summary (compare with above): At grant: No tax At vesting/delivery: Ordinary tax on current share value At sale: Long-term capital gains tax on gain if held for 1 year past exercise Ordinary tax otherwise (including immediate sale)
This section is a quick refresher on how companies raise funding and grow, as this is critical to understanding the value of a company and what equity in a company is worth.
The stage of a startup is largely reflected in how much funding it has raised. Very roughly, typical levels are: Bootstrapped : No funding — founders are figuring out what to build or starting to build with their own time or resources. Series Seed ($250K to $2 million): Figure out the product and market. Series A ($2 to $15 million): Scaling product and making the business model work. Series B (tens of millions): Scaling business. Series C, D, E, etc. (tens to hundreds of millions): Continued scaling of business. 🔸 Most startups don’t get far. Very roughly, if you look at angel investments, more than half of investments fail, one in 3 are small successes (1X to 5X returns), one in 8 are big successes (5X to 30x), and one in 20 are huge successes (30X+). 🔸 Each stage reflects the removal of risk and increased dilution . For this reason, the equity team members get is higher in the earlier stages (starting with founders) and increasingly lower as a company matures. (See the picture above.) 🔹 It is critical to understand risk and dilution to know the possible future value of equity. This article from Leo Polovets gives a good overview. 🔹 If you’re talking with a startup, there are lots of questions to ask in order to assess the state of the company's business. Startups are legitimately careful about sharing financial information, so you may not get full answers to all of these, but you should at least ask: How much money has the company raised (including in how many rounds, and when)? What did the last round value the company at? Will it likely raise more capital soon? How long will your current funding last? (This will likely be given at current burn rate, i. e. no additional hiring.) What is the hiring plan? (How many people over what time frame?) What is the revenue now, if any? What are the revenue goals/projections? Where do you see this company in 1 year and 5 years? Revenue? Employees? Market position?
It takes quite a bit of know-how to be able discuss, understand, and evaluate equity compensation offers. If you don’t yet have an offer, see the sections below on evaluating a company and negotiation, as well.
We all know the value of cash. But determining the value of equity is hard, because you have to figure out or make guesses about several things: Stock value : The value the company will have in the future, which depends on the value of the business, and the number of shares you own. Vesting and liquidity : When you actually will own the shares and when you’ll be able to sell them. Tax : Both purchase and sale of stock can require that you pay taxes — sometimes very large amounts. Also, there are several kinds of taxes: Income, capital gains, and AMT. 🔹 Know the percentage: Knowing how many shares of stock or stock options is meaningless unless you know the number of outstanding shares. What matters is the percentage of the company the shares represent. Typically it would be in percent or basis points (hundredths of a percent). Some companies don’t volunteer this information unless you specifically ask, but it’s always a fair question, since without it, the offer of shares is almost meaningless. You need to understand the type of stock grant or stock option in detail, and what it means for your taxes, to know the likely value. In some cases, high taxes may prevent you from exercising, if you can’t sell the stock, so you could effectively be forced to walk away from the stock if you can't afford to exercise. ❗ If you do get an offer, you need to understand the value of the equity component. You need quite a bit of information to figure this out, and should just ask. If the company trusts you enough to be giving you an offer, and still doesn’t want to answer these questions about your offer, it’s a warning sign. (There are lots of otherarticles with more details about questions like this.) 🔹 Information that will help you weigh the offer might be: What percentage of the company do the shares represent? What set of shares was used to compute that percentage (i. e. is this really the percentage of all shares, or some subset)? What did the last round value the company at (i. e. the preferred share price times the total outstanding shares)? What is the most recent 409A valuation? When was it done, and will it be done again soon? هل تسمح بالتطبيق المبكر لخياراتي؟ Are all employees on the same vesting schedule? Is there any acceleration of my vesting if the company is acquired? Do you have a policy regarding follow-on stock grants? Does the company have any repurchase right to vested shares? Finally, consider the common scenarios for exercising options, discussed below.
If you don’t yet have an offer, it’s important to negotiate firmly and fairly to get a good one. A guide like this can’t give you personal advice on what a reasonable offer is, as it depends greatly on your skills, the marketplace of candidates, what other offers you have, what the company can pay, what other candidates the company has found, and the company’s needs and situation. However, this section covers some basics of what to expect with offers, and tips on negotiating an offer.
🔹 Most companies, especially well-established ones, give roughly equal treatment to candidates. But even so, harder negotiators — or ones that are more sophisticated — can often get better offers. Many companies will give some flexibility during negotiations, letting you indicate whether you prefer higher salary or higher equity. Candidates with competing offers almost always have more leverage and get better offers. Salaries at startups are often a bit below what you’d get at an established company, since early on, cash is at a premium. For very early stage startups, risk is higher, offers can be more highly variable, and variation among companies will be greater, particularly on equity. The dominant factors determining equity are what funding stage a company is at, and your role. If no funding has been raised, large equity may be needed to get early team members to work for very little or for free. Once significant funding of an A round is in place, most people will take typical or moderately discounted salaries. Startups with seed funding lie somewhere in between.
🔹 🌪 There are no hard and fast rules, but for post-series A startups in Silicon Valley , this table, based on the one by Babak Nivi, gives rough ballparks equity levels that many think are reasonable. These would usually be restricted stock or stock options with standard 4-year vesting schedule. These apply if each of these roles were hired just after an A round and are also being paid a salary (i. e. not already founders or hired before the A round). The upper ranges would be for highly desired candidates with strong track records. CEO: 5–10% COO: 2–5% VP: 1–2% Independent board member: 1% Director: 0.4–1.25% Lead Engineer 0.5–1% Senior Engineer: 0.33–0.66% Manager or Junior Engineer: 0.2–0.33% For post-series B startups , equity numbers would be much lower. How much lower will depend significantly on size of the team and valuation of the company. Seed-funded startups would be higher than the above numbers, sometimes much higher if there is little funding. 🔹 One of the best sources of information about what is reasonable for a given company and candidate is to look at offers from companies with similar profiles on AngelList. A 2014 survey of AngelList job postings by Leo Polovets has excellent summary of equity levels for the first few dozen hires at these early-stage startups. For engineers in Silicon Valley, the highest (not typical) equity levels were: Hire #1: up to 2%–3% Hires #2 through #5: up to 1%–2% Hires #6 and #7: up to 0.5%–1% Hires #8 through #14: up to 0.4%–0.8% Hires #15 through #19: up to 0.3%–0.7% Hires #21 through #27: up to 0.25%–0.6% Hires #28 through #34: up to 0.25%–0.5% Keep in mind much of the above information is heavily biased toward early-stage Silicon Valley tech startups, not companies as a whole across the country.
Companies will always ask you what you want for compensation. And you should always be cautious about answering. If you name a number that you’ll accept, you can be fairly sure the company won’t exceed it, at least not by much. Some argue that a good tactic in negotiating is to start higher than you will be willing to accept, so that the other party can “win” by negotiating you down a little bit. Keep in mind, this is just a suggested tactic by some, and not a hard and fast rule. If you are inexperienced and are unsure what a fair offer should look like, avoid saying exactly what you want for compensation very early in discussions. It’s common for hiring managers or recruiters to ask this early in the process, just to take advantage of candidates that don’t have a good sense of their own worth. Tell them you want to focus on the opportunity as a whole and your ability to contribute before discussing numbers. Ask them to give you a fair offer once they understand your worth to the company. If you are experienced and know your value, it’s often in your interest to state what sort of compensation and role you are looking for to anchor expectations. You might even share your expectations early in the process, so you don’t waste each other’s time. Discuss what your compensation might be like in the future. No one can promise you future equity, salary, or bonuses, but it should be possible to agree what they will look like if you have outstanding performance and the company has money. If you’re coming from an established company to a startup, you may be asked to take a salary cut. This is reasonable, but it’s wise to discuss explicitly how much it is, and when that will be changed up front. For example, you might take 25% below your previous salary, but there can be an agreement that this will be corrected if your performance is strong and the company gets funding. 🔹 Always negotiate non-compensation aspects before agreeing to an offer. If you want a specific role, title, opportunity, visa sponsorship, special treatment (like working from home), or have timing constraints about when you can join, negotiate these early, not late in the process. ❗ Get all agreements in writing, if they are not in your offer letter. 🔹 If you’re going to be a very early employee, consider asking for a restricted stock grant instead of stock options, and a cash bonus equal to the tax on those options. This costs the company a little extra paperwork (legal costs), but then you won’t have to pay to exercise, and then if you file an 83(b) election, you’re simplifying life, eliminating the AMT issues of ISOs and maximizing chances of qualifying for long-term capital gains tax. Getting multiple offers is always in your interest. If you have competing offers, sharing the competing offers can be helpful, if they are good. However, dragging out negotiations excessively so you can “shop around” an offer to other companies is considered bad form by some people, so it’s thoughtful to be judicious, and try to time things at once to the extent possible. Reneging on offers: Do not accept an offer verbally or in writing unless you’re ready to stand by your word. In practice, occasionally people do accept an offer and then renege. In the United States, this is considered a very bad thing to do, especially if it put the company in a difficult position (e. g. they declined another key candidate based on your acceptance), and may hurt your reputation in unexpected ways later. Robby Grossman gives a good overview of equity compensation and negotiation suggestions.
Once you have stock options, what are the possible scenarios for exercise? Generally, you should consider these possibilities: Exercise and hold : You can write the company a check and pay any taxes on the spread. You are then a stockholder, with a stock certificate that may have value in the future. As discussed above, you may do this: “Early”, even immediately upon grant Before vesting (if early exercise is available to you) Sometime after vesting, or - After leaving the company, as long as the exercise window is open. 🔸 Recall that often the window closes soon after you leave a company, e. g. 90 days after termination. Wait until acquisition : If the company is acquired for a large multiple of the exercise price, you may then use your options to buy valuable stock. However, as discussed, your shares could be worth next to nothing unless the sale price exceeds the liquidation overhang, since preferred stock is paid up first. 🔸 Secondary market : As discussed above, in some cases it’s possible to exercise and sell the stock in a private company directly to a private party. But this generally requires some cooperation from the company and is not something you can always count on. Cashless exercise : In the event of an IPO, a broker can allow you to exercise all of your vested options and immediately sell a portion of them into the public market, removing the need for cash up front to exercise and pay taxes. 🔹 Note that some of these scenarios may require significant cash up front, so it makes sense to do the math early. If you are in a tight spot, where you may lose valuable options altogether because you don’t have the cash to exercise, it’s worth exploring each of the scenarios above, or combinations, such exercising and then selling a portion to pay taxes. In addition, there are a few funds or individual investors who may be able to front you the cash to exercise or pay taxes in return for an agreement to share profits. Alex MacCaw’s guide includes a few more detailed example scenarios.
This section covers a few kinds of documents you’re likely to see. It’s not exhaustive, as titles and details vary.
When you are considering your offer from the company, make sure you have all of the documents. These should be: Your offer letter, which will detail salary, benefits, and equity compensation. An Employee Innovations Agreement or Proprietary Information and Inventions Assignment Agreement or similar, which concerns intellectual property. In addition, if you have equity compensation, at some point — possibly weeks or months after you’ve joined — you should get a Summary of Stock Grant or Notice of Stock Option Grant, or similar document, detailing your grant of stock or options, along with all details such as number of shares, type of options, grant date, vesting commencement date, and vesting schedule. It will come with several other documents, which may be exhibits to that agreement: Stock Option Agreement Stock Plan (sometimes called a Stock Option Plan, or Stock Award Plan, or Equity Incentive Plan) Code Section 409A Waiver and Release (sometimes this is part of the Stock Option Agreement) If you are exercising your options you should also see paperwork to assist with that purchase: Exercise Agreement. Instructions and template for early exercise and 83(b) election, if applicable. End of year tax documents 📥 You should receive a form 3921 or 3922 from your company if you exercised ISO options during the year.
These are scenarios that can be very costly for you if you aren’t aware of them.
❗ Do not accept an offer of stock or shares without also asking for the exact number of total shares (or, equivalently, getting the exact percentage of the company those shares represent). It’s quite common for some companies to give offers of stock or options and tell you only the number of shares. Without the percentage, the number of shares is meaningless. Not telling you is a deeply unfair practice. A company that refuses to tell you even when you’re ready to sign an offer is likely giving you a very poor deal. 🔸 If you’re looking at an offer, work out whether you can and should early exercise, and what the cost to exercise and tax will be, before accepting the offer. ❗ If you join a company right as it raises a new round, and don’t have the chance to exercise right away, they may potentially issue you the options with the low strike price, but the 409A of the stock will have gone up. This means you won’t be able to early exercise without a large tax bill. In fact, it might not be financially feasible for you to exercise at all. 🔸 Vesting starts on a vesting commencement date. Sometimes stock option paperwork won’t reach you for months after you join a company, since it needs to be written by the lawyers and approved by the board of directors. This usually isn’t a big problem, but do discuss it to make sure the vesting commencement date will reflect the true start date of when you joined the company, not when the stock option is granted. 🔸 If you’re going to early exercise, consider it like any investment. Don’t believe every projection about the value of the company you hear. Founders will tell you the best-case scenario. Remember, most startups fail. Do your research and ask others’ opinions about likely outcomes for the company. ❗ It may not be common, but some companies retain a right to repurchase (take back) vested shares. It’s simple enough to ask, “Does the company have any repurchase right to vested shares?” (Note repurchasing unvested shares that were purchased via early exercise is different, and helps you). If you don't want to ask, the fair market value repurchase right should be included in the documents you are being asked to sign or acknowledge that you have read and understand. (Skype had a complexcontroversy related to this). You might find a repurchase right for vested shares in the Plan itself, the Stock Option Agreement, the Exercise Agreement, the Bylaws, the Certificate of Incorporation or any other stockholder agreement.
Here are some costly, common errors to watch out for on the taxation side.
❗ If you are going to file an 83(b) election, it must be within 30 days of stock grant or option exercise. Note that often law firms will take a while to send you papers, so you might only have a week or two. If you miss this window, it could potentially have giant tax consequences, and is essentially an irrevocable mistake — it’s one deadline the IRS won’t extend. When you file, get documentation of from the post office, delivery confirmation, and include a self-addressed stamped envelope for the IRS to send you a return receipt. (Some people are so concerned about this they even ask a friend to go with them to the post office as a witness!) ❗ One of the most serious tax-related mistakes you can make is to exercise ISOs without first knowing the impact on your AMT obligations. If there is a large spread between strike price and 409A value, you are potentially on the hook for a very large tax bill — even if you can’t sell the stock. This has pushed people into bankruptcy. It also caused Congress to grant a one time forgiveness, but the odds of that happening again are very low. Understand this topic and talk to a professional if you exercise ISOs. ❗ If you exercise your options, and your income had been consulting, not employment (1099, not W-2), you will be subject to the self-employment tax in addition to income tax. Self employment taxes consist of both the employer and the employee side of FICA. Meaning, you will owe the Social Security tax component, 6.2%, up to the FICA wage base, and you will owe the Hospital Insurance component, 2.9% on all of the income. 🔸 Thoughtfully decide when to exercise options. As discussed, if you wait until the company is doing really well, or when you are leaving, it can have serious downsides.
David Weekly, An Introduction to Stock & Options for the Tech Entrepreneur or Startup Employee Anonymous, What I Wish I'd Known About Equity Before Joining A Unicorn Investopedia, Employee Stock Options: Definitions and Key Concepts Dan Shapiro, Vesting is a hack Guy Kawasaki, Nine Questions to Ask a Startup Alex MacCaw, An Engineer’s Guide to Stock Options Robby Grossman, Negotiating Your Startup Job Offer Julia Evans, Things you should know about stock options before negotiating an offer Joe Wallin, RSUs vs. Restricted Stock vs. Stock Options Joshua Levy and Joe Wallin, The Problem With Immediately Exercisable ISOs Barry Kramer, The Tax Law that is (Unintentionally) Hammering Silicon Valley Employees Startup Law Blog, Incentive Stock Options vs. Nonqualified Stock Options Startup Law Blog, Top 6 Reasons To Grant NQOs Over ISOs Investopedia, How Restricted Stock And RSUs Are Taxed Investopedia, Introduction To Incentive Stock Options Forbes, Ten Tax Tips For Stock Options Wealthfront, When Should You Exercise Your Stock Options? Wealthfront, The 14 Crucial Questions about Stock Options Leo Polovets, Valuing Employee Options Leo Polovets, Analyzing AngelList Job Postings, Part 2: Salary and Equity Benchmarks Inc, 5 Questions You Should Ask Before Accepting a Startup Job Offer GigaOm, 5 Mistakes You Can’t Afford to Make with Stock Options Wealthfront, How Do Stock Options and RSUs Differ? Mary Russell, Startup Equity Standards: A Guide for Employees Mary Russell, Can the Company Take Back My Vested Shares? Fairmark, AMT and Long-Term Capital Gain NCEO, Stock Options and the Alternative Minimum Tax (AMT) Accelerated Vesting, What Is An 83(b) Election and When Do I Make It? Fenwick, Section 409A Valuations and Stock Option Grants for Start-up Technology and Life Science Companies Venture Hacks, How to make a cap table VentureBeat, Beware the trappings of liquidation preference Orrick, Startup Forms: Equity Compensation Matthew Bartus, Option Grants: Fully Diluted or Issued and Outstanding Babak Nivi, The Option Pool Shuffle (and table of equity ranges) 🔨 TLDR Stock Options and OwnYourVenture are simulators illustrating equity calculations and dilution.
This guide and all associated comments and discussion do not constitute legal or tax advice in any respect. No reader should act or refrain from acting on the basis of any information presented herein without seeking the advice of counsel in the relevant jurisdiction. The author(s) expressly disclaim all liability in respect of any actions taken or not taken based on any contents of this guide or associated content.
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The De-Nerding Wanstrath and Preston-Werner want GitHub to be used for collaborations that have nothing to do with software.
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The De-Nerding Wanstrath and Preston-Werner want GitHub to be used for collaborations that have nothing to do with software.
It's "Beer:30," and Tom Preston-Werner is standing at a lectern in the vast San Francisco loft where GitHub makes its home. Before him, arrayed on a mashed-up assortment of chairs and couches or topping up a glass of whiskey at the overstocked house bar, are maybe 40 GitHub employees; another 44 around the world are watching a live feed. Preston-Werner has the tired eyes and untended facial hair of a new father, and the low-def biceps of a software engineer. Atop his head sits a mammoth banana-yellow foam-rubber cowboy hat.
The weekly gathering begins with Preston-Werner welcoming a few new employees. The co-founder and CEO then runs through a series of shout-outs to folks who have finished off pieces of code designed either to improve the GitHub site or to make it work better for clients. Then Preston-Werner takes a few minutes to wax philosophical. Taking a page from science writer Steven Johnson's Where Good Ideas Come From , he invokes the importance of "serendipitous interactions," the way powerful ideas can emerge from the most random collisions of people, thoughts, and artifacts. He urges his people--many of them recent hires, most of them in their early 30s, tops--to go out and cultivate new experience, to engage with the unknown. To underline his point, Preston-Werner reminds them that out of the investment the company received in July from Andreessen Horowitz, "about half of a percent" was picked up by Ron Conway, known in these parts as the godfather of Silicon Valley. Preston-Werner met Conway at a Y Combinator conference. Serendipity, indeed.
That venture round was worth $100 million. It valued this little five-year-old company at $750 million. As Preston-Werner speaks, between pulls on a beer, his giant foam chapeau jiggles gently.
As nerd endeavors go, GitHub is pretty much at the top of the food chain. What began as a private project with zero commercial intent has since emerged as one of the world's most--if not the most--powerful development tools for software. In just a few years, it has inserted itself at the center of the developer universe by making it easy for coders around the world to work together. If "software is eating the world," as Andreessen Horowitz co-founder Marc Andreessen put it not long ago, GitHub is where much of that software gets its teeth.
The Andreessen Horowitz bet was the "biggest investment we've ever made," says Peter Levine, the partner who now sits on GitHub's board. It's not hard to see why the VC firm went for it: GitHub's momentum is astonishing. The company says it took 38 months to host its millionth project on the site; the five millionth came in just two months and 21 days. "I don't know a start-up that's not on GitHub," says Jay Sullivan, VP of products at Mozilla, maker of the Firefox Web browser. In other words, your next company, or parts of it, will be built here.
GitHub started as an effort by Preston-Werner and co-founder Chris Wanstrath to solve what Preston-Werner calls a "pain-in-the-ass problem": using something called Git, a version control system developed by Linus Torvalds, the creator of Linux. A version control system is a tool that allows multiple coders to work on the same piece of software without losing track of the various changes made in each version or allowing the source code to be corrupted with lots of contradictory fixes. Torvalds built Git in reaction to the centralized structure of previous version control tools, which made it all but impossible for developers to work together independently. And though Torvalds's system "makes collaboration possible, it doesn't make it easy," says Preston-Werner. He sensed that Git could be "this superpowerful thing if only you could understand it."
Preston-Werner grew up in Dubuque, Iowa; his mom was a special-education teacher and his stepdad an engineer. (His biological father passed away when Tom was a kid.) Preston-Werner was the classic engineer-in-training: ripping apart pieces of gear his stepdad had lying around, hacking the family TRS-80 PC, studying How Things Work books. Eventually, just as the dot-com boom was cresting, he set sail for Harvey Mudd College, east of Los Angeles. After two years, he dropped out to be part of a company run by two fellow Mudd students; then he struck out on his own, first running a digital design firm, which taught him "all of the crap it takes to run a business--taxes, all that," then creating Gravatar, the technology that allows your avatar to follow you around the Web from site to site.
He sold Gravatar to Matt Mullenweg, the founder of WordPress, then paid off his credit card debt and enjoyed the first bit of breathing room he had known in several years. That's when he met Wanstrath, who is still only 27, six years younger than Preston-Werner. ("I started GitHub when I was really young, so I don't have a bio or anything," says Wanstrath, who looks like Gregg Allman run through a reverse aging machine. "My life story's pretty short.") The two were part of the growing crew of developers working in Ruby on Rails, a Web development framework that has itself become a major force. "One of the things we talked about in the Ruby community was Git," Wanstrath recalls, "at the time a very esoteric version control system." In October 2007, they set about improving Git, partly for fun and partly to make it more useful in their professional lives. They stayed in their day jobs and noodled at GitHub primarily at bars and coffee shops around the SoMa neighborhood. During this period, they picked up two other co-founders, PJ Hyett and Scott Chacon.
GitHub went live in February 2008, and soon Geoffrey Grosenbach, founder of PeepCode, essentially demanded to pay for the service. Suddenly, a dork pastime was a business, and by July, Preston-Werner was confident enough in it that he passed up the offer of a $300,000 bonus and stock options from Microsoft, which had acquired Powerset, the company he worked for at the time.
Today, a programmer in Dubai can drop a chunk of code in a "repository" on GitHub's site, post a description of his project and what kind of help he's looking for, and then watch as coders around the world dig in and contribute. If the software is open source (that is, free for the taking by anyone who wants it, with minimal restrictions), the "repo" is visible to all three million developers who work on GitHub. Depending on how interesting the idea is--it might be a simple feature for a website or an entire operating system--hundreds or even thousands of people might "fork," or copy, the code and start working to improve it. When a developer thinks he has cracked whatever problem or portion of the problem he was working on, he can make a "pull request" to the "maintainer" of the repository to review his suggested fixes. The maintainer integrates some or all of the new code as he sees fit.
GitHub is in some ways like Wikipedia--highly social, tapping into the human desire to contribute to a common goal. When so many brains are engaged at once, the process of development, refinement, and deployment is radically accelerated. Each revision should, in theory, make the code more powerful, get it closer to the point where it can be shipped as an element in a larger software product, whether open source or commercial. "If the barrier to collaboration is too high, then you're not gonna do it," Preston-Werner says. "But once you get that barrier low enough, once you pass a certain threshold, everybody's contributing." GitHub is adding users at the rate of 10,000 per weekday.
Unlike Wikipedia, however, GitHub has a business model. Essentially, GitHub offers programmers and companies a choice: They can use the collaborative platform for free as a place to build open-source software, or they can pay to use it behind a wall, where they can develop proprietary software that forms part of a commercial product or service. In the first case, your willingness to make your code available to everyone earns you the right to exploit the web of open-source coders working on the GitHub site. In the second, your company's developers work in private, using the collaborative features GitHub has built but not its distributed global network of talent.
"If you have code on GitHub but the whole world can't see it, then you're paying for it," says Preston-Werner. There are three payment tracks. One is a personal plan that costs as little as $7 a month. (The price is based on the number of repositories you have.) Then there is an organization plan, which has features for more sophisticated team management and starts at $25. The big-money option is the enterprise plan, which involves clients downloading a version of GitHub to live locally on their servers. It can cost millions of dollars a year. Enterprise clients include Lockheed Martin, Microsoft, LivingSocial, VMware, and Walmart. GitHub doesn't talk about how much these companies, specifically, are paying, but it has hundreds of thousands of paying customers between the website and the enterprise client base.
Levine, the Andreessen Horowitz partner, says his firm was first drawn to GitHub because it was "a growing enterprise with 300 percent year-over-year annualized growth--in a market that has been unchanged for a very long time." Sounding amazed even several months on, he marvels that the co-founders had gotten to "really interesting levels of profitability and revenue without a dime of outside funding and without even building out a sales organization--they're all engineers!"
A grown-up sales operation, Levine says, is just a first "tactical" step. He and the lads have big plans.
For survivors of Web 1.0, GitHub's offices bring the memories--or night sweats--flooding back. The 14,000-square-foot loft is rigged out with air hockey, Ping-Pong, a pool table, and an Xbox 360 (hooked up to side-by-side flat screens). There's a catered Thursday lunch (families are invited), a fridge full of microbrew, and a handmade wooden kegerator with an inlaid Octocat, GitHub's fantastical mutant mascot. Numerous side rooms house the many other toys designed to "optimize for happiness" for GitHub's 145 employees, who work whenever and wherever they like: electric guitars, an amp, and a full matched set of harmonicas in the jam room; a Skype chamber; a womb room with low lighting, a shag rug, and four egg chairs. There's a ladies' lounge with a pink, plasticized fainting couch, and the executive lounge, complete with faux-antique globe (which conceals a 16-year-old bottle of Lagavulin) and lots of manly leather. Actually, the whole office smells of leather--and revenue, which is what makes it so not like 1999.
If the term open-source software triggers some sort of narcolepsy neurotransmitter in you, you are not alone. It certainly did in me, to the extent that I thought about it at all. But the further I wandered in this world, the more wondrous I found it to be. Those of us who don't write code tend to be oblivious to the sheer labor involved in creating thousands or even millions of lines of the stuff, all of which have to function perfectly if a piece of software is to run bug free. A single project on GitHub can entail months or years of work and countless strings of dialogue among maintainers and coders hoping to contribute.
It's hypergranular work and has to be, not least because open-source software has become the bedrock of almost every company on earth. From Apple to Microsoft to the tiniest start-up, open source is part of the software stack--and many companies are built mostly from open source. And that, of course, is the point: Open source means a new business doesn't have to start from zero; it can pull down prefab pieces of software infrastructure for free, building only the bits it needs to bring its product to life. John Pettitt is founder and CEO of Repost. us, a service that allows news articles to be embedded as easily as video, and to carry their advertising and analytics along with them; earlier, he was the founder of Software, which became Beyond, and CyberSource, a credit card fraud detection company bought by Visa for $2 billion in 2010. Back in 1994, when Pettitt was starting Software, he says, "there was no e-commerce software, there was no e-commerce platform; I had to write my own credit card processing, I had to write my own storefront. Everything we had to do, we had to do from scratch, because there were none of the building blocks there." Pettitt built much of his new company on GitHub. "Today, you can sort of Lego things together in a way you never could before," he says. "And the corpus of information and tools is growing at a huge rate."
Those Legos form the skeletal system of almost every new company; the profitmaking intellectual-property layer is skin thin, sitting on top. "It's no different than having two-by-fours and electricity," Preston-Werner says. "If you have a ready-made Web server and Web framework, for example, that represents hundreds of thousands or millions of man-hours of work that you don't have to put into creating a product."
That is exactly why GitHub is formidable: It is at once a lumberyard and a workspace. Entrepreneurs on the site can find, or help develop, almost all of the open-source raw materials they need and set up their own closed place to integrate those materials with their IP. What's more, by simplifying Git, GitHub has turned a tool even serious coders found arcane into something useful to the "casual forker," in Wanstrath's term. "We want to enable people who don't know each other to collaborate on the same thing, toward the same goal," says Wanstrath. "This is all I want to do--forever."
There has been considerable rumbling lately that the Web is turning into a Monopoly board or mall, with a few big anchor stores and a bunch of rabble scrambling either to build on top of them or to find a survivable place in their shadows. "The openness that drove the Web and its richness are definitely under attack," says Tim O'Reilly, founder and CEO of O'Reilly Media, the producer of industry-leading programming manuals, tech magazines, and conferences. "This happens again and again when something new comes on the scene. There's usually a huge sharing economy, with lots of innovation and lots of openness, and then some animals become 'more equal than others,' in Orwell's wonderful phrase, and then it tends to start to stagnate. But that impulse to create goes and bursts out somewhere else."
That somewhere, at least right now, would seem to be GitHub. In fact, it's possible to see GitHub as a new killer app for the Internet--a "mini Web," as Preston-Werner describes it, a place where networked minds actually build things together.
"The network effect is awesome," Preston-Werner says, sitting in the situation room, another ironically themed chamber (this one has a red Batphone to nowhere, a massive table in burled veneer, Big Boy Executive Chairs, and LED signs with the time zones of various GitHub outposts). "There are standards now based on GitHub, so everybody can come in to a new project and immediately know how to get the code, how to contribute code, how to review the code, how to submit issues to the code base. The more people do that, the stronger the effects and the gains from having a uniform, well-known, standardized system. And that's happening really, really rapidly."
That network effect gets reinforced in numerous ways. For example, a developer on GitHub acquires a social reputation, and that reputation becomes a way to find new, paying work; the network's role as a placement service helps it to grow still larger. The truly badass potential of GitHub, though, is that it isn't only a force multiplier for producing code but also for the generation of ideas--and for the products created from those ideas. As Preston-Werner says, projects hosted on GitHub will increasingly be "not just code, but anything that involves working on files on a computer: books, hardware projects, schematics for circuit boards, legal documents--anything that ends up in a digital format." This is already happening on the site, including projects for books (several coding manuals, for example, are being written on GitHub--including one about GitHub), hardware (OpenRov has the hardware design, software, and circuit schematics for its underwater robots on GitHub), and government (the U. S. and U. K. governments both work on the site).
Wanstrath, who handed the CEO title over to Preston-Werner in June and is an absolute geyser of GitHub zeal, agrees that as more people pile into the service, a shift is taking place: "Now we are finding that it's not just about the code; it's about, 'Hey, I want to work on this with you.' That's really eye-opening to us and gets everyone here superexcited. Working with someone else is just an awesome part of being alive. Creating art, creating tools, creating documents, doing homework, anything--it's not limited to programming. I don't see why musicians wouldn't want to work this way, for example."
In other words, as GitHub gets bigger, its power becomes less about the platform itself than about the people on it. One day in the GitHub offices, I ran into David ten Have, a New Zealander (and an Inc. cover subject in 2009). Ten Have is founder and CEO of Ponoko, a company focused on developing "the tools to enable digital fabrication." That means a system that could, one day, given a disassembled MP3 player, spec out each component, relay those specs to a 3-D printer, and have the printer produce all the pieces required for assembly by a nearby robot. Ten Have says, "GitHub makes this easier and faster, because it has a platform that enables the collaboration and, most important, the social norms to encourage people to look at the world collaboratively. That is fundamentally why GitHub is important beyond software: Ethos and attitude are transferable--into lawmaking, product design, manufacturing, biology, chemistry, dance, music, moviemaking, books, cooking. The list goes on."
و على. Which suggests that GitHub has only begun to grow--as a business, as a tool for business, and as a cultural force. "It's this huge ricochet effect," Wanstrath says, nearly manic with optimism. "We are this thing that people can step on, like an elevator, and then go shooting into space."