Apr 03 2024 28 mins 1
Episode 016: Startup employees often receive stock options as part of their compensation package, offering them the opportunity for financial gain and a stake in the company's future. However, many employees are unaware of the complexities and challenges associated with stock options. They leave money on the table by abandoning their expiring stock options unexercised.
In this episode of Alternative Universe, Steve talks with Dave Thornton, Co-Founder, CEO, and Chief Investment Officer at Vested. Having spent a large part of his career as a serial entrepreneur, Dave’s most notable accomplishments include the founding and successful sale of PatientFinder, and his collaboration with Emilio Seijo, a Principal Quantitative Strategist at Vested, in creating a real-time illiquid asset pricing model. Dave also spent time building the systems at a hedge fund within Citigroup and worked as a Program Manager at Microsoft.
Dave talks with Steve about the challenges faced by startup employees when exercising their stock options. He shares how Vested helps employees understand and navigate their stock options, allowing them to unlock the potential value of their equity.
Join us as we discuss:
- [02:41] - How Dave got started in stock options.
- [06:12] - The origin of Vested.
- [10:21] - How Vested evaluates opportunities.
- [15:25] - The challenge facing public markets today.
- [19:13] - Pros and cons of liquidation plans.
- [21:25] - Vested's approach to serving investors.
- [26:54] - Vested's strategy to access top brand VCs.
Key Takeaways
- Vested empowers startup employees to capitalize on their hard-earned equity, primarily by providing funding to help exercise stock options.
- Seventy-six percent of people abandon their expiring stock options, indicating a lack of knowledge, support, and resources to exercise them. This results in missed opportunities for wealth creation.
- Vested aims to address the challenges and limitations of accessing venture capital by unlocking the potential of employee stock options and providing a more inclusive and accessible investment opportunity.
Quotes
"In your employee stock option plan, there is a provision that says when you leave for whatever reason, you have 90 days after you leave within which you have to exercise your vested stock options, or else they go up and smoke." ~ Dave Thornton
"VC has been notoriously hard to access for several reasons. One is that to get into the best brand-name VCs, you usually need to be able to write a really big ticket, and that's if the VC is even still open for subscription. The other is that even for people who can access venture capital managers they like, VCs are known to be a high-octane asset class." ~ Dave Thornton
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All content on this podcast is for informational purposes of a general nature only, and does not address any particular individual or investment. Nothing in this podcast constitutes accounting, legal, tax, financial or other professional advice. The discussion on this podcast of any entity, product or service does not imply an endorsement thereof, and the podcast participants may have a financial interest, whether through investment or otherwise, in one or more of any such entities, products or services. Please seek independent advice from a financial professional about your investment needs.
