Yet another reason working for most startups is a scam

Working for a Silicon Valley startup feels like those scenes in a con movie: You're the wide eyed bettor at the pool table, convinced you have a shot...Until you realize you've been playing against world-class hustlers.

I don't think it was always that way. There were lots of overnight millionaires when tech unicorns were going IPO like gangbusters. But we haven't had a true unicorn in years, so right now, getting paid in equity is choosing to work for nothing.

This is cynical and more frequently wrong that right. In most cases, the company is trying to avoid securities regulation screw ups, tax screw ups, other regulatory or legal screw ups. Sometimes they are overly conservative and it seems annoying, but that's what they are doing.

As an example, Stripe went out of their way to get former employees paid.

This is not cynical. The situation is that a) there will be a team of very expensive lawyers and accountants working out how to best implement the plan that benefits the company (whom you can’t compete) and b) crucially, you have no control and prior on knowledge on what that plan would look like. It is not about the company trying to screw an individual over, it’s more the fact that the company will be very unconcerned if their plan is against your benefit, and you have no way to align your own benefits with the plan.

100% disagree. Just because one company goes out of the way for PR good will does not many many other companies will. Many companies do not care about you once you are a departed employee.

For example, see how easy it is to get your bi weekly paycheck copies. Most will not reply at all.

Many companies will throw existing employees and even founders under the bus if they think their is a few dollars to be won. To think they wouldn’t play games with ex employees is naive in the extreme.

Wow, check stubs used to be the basic social currency around renting and etc. Are you saying people can't get these anymore? Or maybe they know too much and don't care?

I assume GP is talking about getting paystubs from a former employer, not from a current one. I've never had any trouble getting paystubs from my current employer; they were always available through the HR website portal (ADP, Workday, etc.).

> This is cynical and more frequently wrong that right

If you are joining a startup as an employee and expecting your equity to worth something its important to be aware of the risks. And trying to sell as an ex-employee is a Risk.

Maybe I'm a cynic but having worked in employee equity I have seen more times that companies essentially turn their back on ex-employees than i have seen them actively helping them on liquidity transactions like tender offers.

I don't think it's cynical at all. Unfortunately I can't provide concrete examples, but I recall many instances over the past 15 years or so reading stuff here on HN where founders/companies expressed a belief that they should be able to claw back even vested equity from employees who have left the company pre-IPO.

It's super super gross, but it's unfortunately a thing. Hopefully that's not what's going on here with OP, but I wouldn't be surprised if it is. If the company is offering a sell-to-cover option to existing employees, they are certainly capable of doing so for former employees as well.

It was noteworthy that Stripe did that. The fact that it was unusual should speak to which behavior is more common by companies.

True that the company needs to follow regulations. But they could do "net exercise", or "sell to cover". Instead they choose "pay cash or forfeit" path.

Even that has downsides - they are effectively guaranteeing a large sale right at the end of the lock-up. It's hard to know if investors pushed back on that or from where the pressure came. This stuff is more complex than it seems, companies are rarely just being d*cks.

That's pretty normal, though, and they're offering sell-to-cover as an option to their current employees, so that sale at the end of lock-up is going to happen regardless.

I'm not convinced these events represent a significant enough number of shares to move the price, though. And regardless, many current and former employees will use this opportunity to dump more shares than just to cover withholding. I wouldn't be surprised if the number of shares sold normally at that time will dwarf the number sold to cover tax withholding.