<story><title>Amazon bought Eero for $97M and employees still got screwed</title><url>https://mashable.com/article/amazon-eero-wifi-router-sale/</url></story><parent_chain></parent_chain><comment><author>aetherson</author><text>I don&amp;#x27;t understand what people expect in this kind of situation.  The company was bought for around the amount of money that they took in investment, or less.  Why would the employees get anything?  If preference didn&amp;#x27;t exist, and I could take $10M in investment at $100M in valuation, and then the next day liquidate the company, return $1M, and keep $9M, obviously that would just mean that nobody would invest in startups any more.&lt;p&gt;Does it piss people off that the execs got retention bonuses?  You&amp;#x27;ve got to give the execs some incentive to stay around if you want to keep operating the company.  Do people expect execs to work out of the goodness of their hearts?&lt;p&gt;The company failed.  That means the stock isn&amp;#x27;t valuable.  What is hard about this?</text></comment>
<story><title>Amazon bought Eero for $97M and employees still got screwed</title><url>https://mashable.com/article/amazon-eero-wifi-router-sale/</url></story><parent_chain></parent_chain><comment><author>olliej</author><text>Again, if your offer includes a stock grant&amp;#x2F;option&amp;#x2F;whatever stake that doesn&amp;#x27;t have the same priority as those owned by the executive team then you need to treat it as having zero value.&lt;p&gt;If a company believe its stock is sufficiently valuable to be worth being used as compensation then it shouldn&amp;#x27;t feel the need to give pre-IPO employees low-priority &amp;quot;equity&amp;quot;.&lt;p&gt;I recognize people argue that you&amp;#x27;re taking a lower salary because the &lt;i&gt;potential&lt;/i&gt; return, but it fails to acknowledge that there is additional risk and cost to the employee:&lt;p&gt;* the potential to suddenly have no employment or insurance&lt;p&gt;* vastly inferior insurance and benefits&lt;p&gt;* significantly reduced job mobility - often this &amp;quot;equity&amp;quot; is surrendered when you leave a company, but that equity is ostensibly to make up for a reduced &lt;i&gt;salary&lt;/i&gt;. It&amp;#x27;s earned income that can be stolen from people who earned it.&lt;p&gt;The first also has a future cost as well, because subsequent salary negotiations will happen with your prospective employer knowing that you &lt;i&gt;need&lt;/i&gt; your job.&lt;p&gt;So rather than trying to pretend that &amp;quot;equity&amp;quot; justifies a lower salary, employers need to recognize that equity is being granted to compensate for the risk their employees are taking on. The more risky the stock, the more stock needs to be granted - so if the equity is structured to put employees at the end of the spectrum of exercisable equity needs to represent vastly more of the post-investor-payouts equity.</text></comment>