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03/03/2016

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Hope you realize, Dan, that any lack of comments responding to your series about stock options is not a sign of disinterest but a compliment. Such excellent content invites no argument and creates no discontent but only inspires admiration for its sweeping but comprehensive treatment. Readers may not criticize it but they will enthusiastically apply it.

Thank you!

Thank you so much Jim! I really appreciate that. I sincerely hope that this series helps companies in handling their equity compensation needs.

I agree with Jim. Your posts are of high interest to me but perhaps many are not involved in the equity side of compensation and rewards. Stock ownership is a highly valued reward surprisingly deep in most organizations for reasons of having a 'piece of the action' even more than for the obvious technical issues you mention about equity ownership.

This has been a good and valuable discussion of some very esoteric points. I have followed it with great interest, and I am looking forward to the March 15 piece.

Thanks everyone. I hope that I can continue this series through some of these important and misunderstood areas and into a series on how it can be done better and more practically.

I feel like I am in a race against time. Many factors are contributing to an urgent need to address these plans and at least once or twice a week I see an article about and "innovative idea" that is misinformed and has disaster written all over it.

The latest was an article explained how extending the post termination exercise period to the full 10 year life of the grant was one of only two steps required to "transform" an equity program. (The other step was better communication.)

Of course extending the life has some real rewards for the participants, but it also has some significant risks for the company. I will expand on these in a future article but...1. If everyone keeps their equity then you never get to use that equity for the person who replaces the individual who quit. 2, If former employee exercise and hold their equity (in a private company) you end up with shareholders who you may not want, or even know anymore.. 3. Tracking and cimmunicating with ex-employee, especially for many years is not as easy as it sounds. 4. When the individual finally does exercise they must receive a W-2 for the year of exercise, even if they haven't been an employee for almost a decade...and the list goes on.

Unfortunately, these "silver bullet" articles are always popular, especially among entrepreneurs who are looking for easy shortcuts. I will keep this series up until I have covered most of these issues at a reasonable level.

Thanks for the support. Please feel free to refer people to these article if they have questions.

oh...and here's the link to that article I mentioned in the previous comment.

http://firstround.com/review/transform-employee-equity-compensation-in-two-steps-heres-how/

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