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How to Negotiate the Best Stock Options Package

In This Article:
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    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

    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

    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

    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

    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

    What To Read Next
    How To Invest In Venture Capital

    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

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