I'm not sure I agree. How many tech IPOs have there been this year? 20 or 30? Of those 20 or 30 companies, how many of their peers at founding (~2010-2013) have survived?
If I take knowledge of 2020, go back in time, and take a job, it seems like a great deal. If I'm back in 2010 or 2011, and take only knowledge of the world at that time, would I have chosen AirBNB? I'm not sure.
Even if I did, what are the odds I could/would stick around long enough to make it to the IPO -- or was willing to exercise illiquid stock at departure with years to go before the stock can be sold?
To make it fair, one should of course also consider companies which did not IPO but had good acquisitions. I'm not sure what that number is, 300? 3000? Still, across a field of 20,000 or more startups it is unclear how I'd get to this smaller set.
I think there are def things that can increase the odds, but I dont think it is fair to look backwards using 2020 knowledge.
Worse, you’re penalized the longer you stay at a company pre-IPO if you ever want to leave. If you do decide to exercise your shares, you not only have to pay the cost of exercise, but you also have to pay taxes on the difference in strike price and presumed current market value. Despite there being no actual market, the high possibility that there will never be a market, and that “current value” may reflect extremely favorable investment terms not available on the open market.
If your strike price is $1/share, you have 100,000 shares, and the last funding round closed at $20/share, you have to pay $100,000 to exercise and pay taxes on $2,000,000 that you’re still highly likely to never actually have the opportunity to turn into real dollars through a stock sale.
The longer you stick around, the more you’re incentivized to stay waiting around for a liquidity event at a job you’ve outgrown and potentially hate at this point. While the company itself has incentives to delay IPO as long as possible, knowing full well that they’ll lose a sizable amount of their burnt-out senior talent within months of going public.
Add to this the possibility of a "reverse stock split". My friend's old company wiped him and many of his colleagues out just prior to being acquired by Google.
If I take knowledge of 2020, go back in time, and take a job, it seems like a great deal. If I'm back in 2010 or 2011, and take only knowledge of the world at that time, would I have chosen AirBNB? I'm not sure.
Even if I did, what are the odds I could/would stick around long enough to make it to the IPO -- or was willing to exercise illiquid stock at departure with years to go before the stock can be sold?
To make it fair, one should of course also consider companies which did not IPO but had good acquisitions. I'm not sure what that number is, 300? 3000? Still, across a field of 20,000 or more startups it is unclear how I'd get to this smaller set.
I think there are def things that can increase the odds, but I dont think it is fair to look backwards using 2020 knowledge.