Executive Tips For Negotiating The Best Stock Options Package | SVIC Interview

Silicon Valley Investors Club (SVIC) is a global community of STEM professionals interested in making smarter investment and career decisions.

Collin Cadmus – two-time VP of sales, and founder of his own consulting and advisory firm – shares all the details you need to know to understand stock-based compensation. 

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In This Talk, You’ll Learn About:

  • Stock options – a basic breakdown
  • Expectations based on role and company stage
  • Key definitions and terms relevant to options
  • Items you don’t know, but should regarding equity
  • Hot topics and different ideas stimulating change for the future

Related Article: Building Wealth with Index Funds, Angel Investing, and Venture Capital

Episode Notes:

00:08 Welcome to Straight talk by Collin Cadmus

00:38 Aim of discussion – to fully grasp the concept of equity

00:50 Introduction to the members of the panel and their roles

02:04 Format of the five parts of the agenda for discussion                                                   

02:59 What are stock options and the reasons for issuing them

06:01 Examples of projected profits to be garnered after joining as a SDR, VP, or AE

07:43 Best-case scenario earnings on stock as a SDR

09:13 Expectations and growth of SDR and AEs

11:13 Basic Terminologies to expect

14:48 The role of the Account Executive in the equity process

16:15 Getting the best market rate and/or Commission plan

18:11 How to avoid dilution and anti-dilution protection

19:14 Explanation of the different pay rates at different stages in your career

20:40 Expectations of the VP of sales

25:03 Exiting a firm and purchasing shares experiences

26:48 Decisions surrounding leaving a company without exercising your stock options

29:35 Comp package expectations for billion-dollar companies

Related Interview: Chamath Palihapitiya | Investing In The Future 2021 

33:03 What happens when you leave before your options have fully vested and how to think about stock options and share dilution 

35:26 Basic equity/share terms

35:53 Definition of an option’s Strike Price

36:00 Definition of Stock Cliff period

36:22 Definition of Vesting Period

37:26 Exercise and negotiation period

38:85 Differences between preferred and common stock

39:55 Negotiating terms and processes

41:05 Definition/explanation on selling secondary stocks to a new or existing investor

43:29 How to handle separation agreements

44:33 Secondary rights inquiries prior to joining a company

46:18 How founders can cash out between raising rounds of capital

Related Article:  How To Invest In Startups With Angel Syndicates

47:33 Differences between single trigger and a double trigger acceleration

53:02 Negotiation practices and options whilst in a position for 4 years

56:44 How to navigate legal jargons and avoid errors in the negotiation process

58:48 The expected earnings from an exit negotiation

61:20 How to differentiate tax implications

62:17 Handling liquidity to earn the best benefits

63:56 How to optimize for cash versus equity

70:30 Explanations on the antiquated four-year vesting schedule

73:49 Steps in winning at the negotiation process

76:27 The impact of remote work on everyday life

Related Interview: Interview with Ray Dalio Founder of Bridgewater Associates and author of Principles: Life and Work

77:19 Requesting for the company to invest in your development

78:07 Optimal times to request and negotiate added benefits

81:47 Suggestions on the inclusion of a lawyer in the negotiation process

83:00 Advice on forming long-lasting bonds with persons in that area of expertise

85:14 The importance of understanding different tax and legal implications for different countries

86:01 Disclaimer and call to action to consult a tax attorney for correct information

87:54 Title inflation and its impact

89:58 Thank you and invitation to visit the website and purchase – Addicted to the Process by Scott Leese found at link below

Books mentioned in the talk:
Addicted to the Process: How to Close Transactional Sales with Confidence and Consistency by Scott Leese

Related Article: An Engineer’s Guide To Building Wealth

 

 

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