Do the math on your stock options - <AUTHOR> http://jvns.ca/blog/2015/12/30/do-the-math-on-your-stock-options/ <comment><USER4> I'm really interested in other people's experiences with understanding how their stock options work.

It seems really easy to misunderstand something serious, even if you know quite a lot about equity.

<comment><USER5> I got an offer from a late-stage (not sure if that's the right term, but they had a shipping product) non-public startup that included 10,000 stock options. That sounded like a lot, but I had problems evaluating that number without knowing the shares outstanding. I asked for that figure, and was told it was privileged and confidential.

I decided to value the options at $0, and instead think of them like a non- monetary perk: "free lotto ticket Wednesday". I ended up turning down the offer.

Was that experience normal? Did I have a right to know the shares outstanding?

<comment><USER6> If they told you that the number of outstanding shares was privileged and confidential they are crooks in nice suits.

Also at this point in time there is so much shady stuff going on with options that you should always always value options at zero. Frankly if all you are offering is your labor in return for options you don't have the pull to get a particularly good deal. (Example: Friend worked three years at a startup. Friend is smart. Friend got ~$50,000... whoop dee doo dah day)

Only other advice I have is, if you are considering exercising any stock options you need to talk with a tax accountant before you pull the trigger. No exceptions.

<comment><AUTHOR> _> If they told you that the number of outstanding shares was privileged and confidential they are crooks in nice suits._

Never attribute to malice that which is adequately explained by stupidity.

Getting a seed round doesn't magically confer the founders/C*Os with an comprehensive understanding of how company equity works. Or common sense.

<comment><USER7> In all fairness, anyone who doesn't get that the expression c/x where c is known and x is unknown can match any given rational number - or the implication that this makes c convey zero information - is pretty much definitionally unfit for running a tech company. So malice might actually be the charitable explanation here.

I mean, imagine if someone followed the same practice for the salary part of compensation: "We will pay you money!" "Eh... how much?" "Some. The actual number is privileged and confidential."

<comment><USER8> ^^ At least in that case you would see in 2 weeks what your actual salary is ;)

<comment><USER9> Oh but this company pays annually and you got hired in January. Sorry ;)

<comment><USER10> There's a vesting cliff so you only get 25% of your salary the first year.

</comment></comment></comment></comment></comment></comment></comment></comment><comment><USER11> Options are for suckers.

Do you want to be an investor? No? then why would you pay for stock out of your own money?

At our startup everyone gets the same stock, not options, through our Equity Incentive Plan. Here's how it works.

1\. We lend new employees the amount of money it would take to buy common stock on a non-recourse promissory note the collateral in this case is the stock itself.

2\. The employee then buys the shares from the company with the loan.

3\. The employee then files an 83b election so that when it comes time to cash out, they only pay taxes at the strike price of when the shares were bought.

4\. At a liquidity event, the promissory note goes away and they own the shares outright

5\. They only pay taxes when they sell their shares not when they buy them

Now there are other provisions like if they want to sell prior to a liquidity event, we get rights to buy them back first if we choose to - in which case we just write off whatever the unvested portion from the note and take those shares back.

In the end it gives the employee actual rights to the same class of stock as the founders, so we can't fudge our employees out of stock benefits without hurting our own shares. This also prevents them for having to lay out any money until there is an actual no kidding liquidity event, so they take no risk of paying taxes on something which might be worthless. Even then they will only ever have to pay taxes on the shares, the promissory note goes away, so in effect looks like a equity grant at the time of sale.

<comment><USER12> This is exactly what I was looking for. As a first time founder at a small private business I was looking for a nicer way to compensate the employees other than sticking them with a huge tax bill as thanks for our success.

Has this approach held up in court or survived an audit? Do you actually transfer the money to the employee's account? How do how do you prevent them from having a program to immediately wire the money to Zurich and run off, given that you have a non-recourse note for the stock that never got purchased?

[edit] I say small business because we do not yet have the 10-15% weekly growth required to be called a startup. Until you are expanding like a airbag, you are just fooling yourself that you matter by calling your company a startup.

<comment><USER11> >Has this approach held up in court or survived an audit?

Yes, it's actually a very old way to do things that fell out of favor in the 80s in favor of options. This way of doing it is more complex and more risk for the employer, so it makes no sense to do it over options if your goal is to just give tokens to employees.

>Do you actually transfer the money to the employee's account?

No, it's all papered

</comment></comment></comment><comment><USER13> Always ask for:

1\. TRANSFERABILITY. If you are given options to buy privately-held common stock in lieu of compensation, you must demand transferability. Rights of first refusal (ROFRs) are fine. "Board approval" is not. "Board approval" means "you may not sell your shares until we go public, except to us, if and when we feel like it, and at a price we get to unilaterally decide".

2\. CASHLESS EXERCISABILITY. Always ask for cashless exercisability. In the public market, if you ask your broker to "cashlessly exercise" in-the-money options, here is what happens. First, your broker lends you the money to exercise the options. Then, the broker sells some of the resulting stock. Finally, the broker pays herself back, plus a pre-disclosed fee, and returns the rest to you.

This also works with private stock. (Unless you forgot Rule No. 1; if your shares aren't transferable you've already been screwed.) But you may not require a broker. Some companies allow for direct cashless exercise. Suppose you hold options for 100 shares struck at $100 per share. You need $10,000 to exercise. The company figures its stock's "fair market value" is $110. You check with outside sources, _e.g._ a private-stock broker, and conclude this is not much less than what you could sell your stock for in the market. Your stock is worth $11,000 to the company; it is $1,000 in the money. After cashlessly exercising with the company you would get $1,000 of stock, _i.e._ 9 shares. (Fractions of shares are usually lopped off in these calculations.)

Plus: you got shares without putting up capital. Minus: you lost the upside (and downside) on ninety-one shares. That said, 9 shares is better than 0 because you had no capital to exercise upon termination.

<comment><USER14> I've never seen the ability to customize these kind of things because they generally are, in my experience, part of the core options agreement for the entire company and would require BoD approval. Thus, you're asking a lot - works if your a key employee but probably not for the average employee. Would love to hear if people have been able to get these terms.

<comment><USER15> Righto, and asking a lot of demands/questions means the company is not going to like you as much and will influence your relationship after the offer is accepted. The info you get will be standard and there is certain info they are not going to want to share.

Basically a casual ask for "can you share how many options are outstanding?" is about as good as you are going to get. Totally good. Non-stand demands? Not so good.

If the VC has preferential shares (they do) just realize that's ok - <USER2> probably fair. Don't join the company if you don't think it can exit above it's funding amounts if you are in for the stock - but hopefully you're in it because you really will love the position and the stock is just a bonus if it makes it.

That's the most important thing :) You don't want to be in a job you don't like just because it's profitable IMHO.

<comment><USER16> There is absolutely no reason not to disclose the number of outstanding shares. Failure to do so means the denominator in the equation can be anything. One or one billion. At that point you have to value the entire option nonsense at $0 total, or even negative given the tax implications. It takes all the truth out of the statement "our cash compensation is below market because of our generous option grants." If I can't figure out the monetary value of the options at the given strike price, I have no way of knowing if they're generous or not.

<comment><USER15> Reasons exist.... One reason is likely that they want to keep the valuation confidential outside of the company (people talk), because as a private company that information doesn't have to be public. It's not a great reason for the employees - but it's there, nonetheless.

It's tricky to share that with employees and not have it get out.

That being said, if it were all public, I think that would be fine, I'm not sure what results that would cause if every company did that, and it might be cool if every company were required to by law (hint, hint, congress!).

<comment><USER17> "Reasons exist"

And absolutely none of them are valid. If you're going to have this person work on the core of your company, there is absolutely no reason to not be up front with them.

<comment><USER15> It's quite valid and exists as a reason, you just don't agree with it :)

<comment><USER17> No, it's not valid. The only reason it would be done is for deceitful reasons. Therefore, not valid.

<comment><USER15> Keeping it private here means private from external companies that should not have access to that data, not employees. This includes competitors, M&A targets, and investors who have not yet invested and should not have access to the books.

I do however strongly believe in tempering expectations, it's wrong to try to retain people by thinking they have more than they do.

</comment></comment></comment></comment></comment></comment></comment></comment></comment><comment><USER18> Stories of equity working out well are rare in these comments. I think in part this is because contentment is silent, so I'll share a bit. I joined a private company with over $100M in revenue about 3 months before IPO. They couldn't say they were in the process when I took the job, but it was hinted at strongly. I got an options grant with normal 4 year vest that amounted to an actual face value of about $50k. Being successful, I imagined they could be worth $100k, or a $25k/year bonus on top of my salary. All of my actual negotiation was of the salary component, and I was very happy with the outcome.

The company went public, and the following year there were a couple events -- a nice earnings beat, some positive news, etc -- that pushed the stock up. Around that time I hit my 1 year cliff so I had 25% of my grant vested. I sold every vested share and used that as a down payment on a house in the bay area. I had a very large tax bill the following year that I paid by selling a bit more equity. But, I have a house that has appreciated since I purchased it, not to mention a nice place to live.

In year 2 I started receiving add'l RSU grants, and I usually sell them as they vest. Here's the test: If they gave you a cash bonus would you BUY stock? If not, sell it.

In the end, my initial option grant will end up worth $300-400k, adding almost an entire extra salary to our household income.

We've been fortunate, have given back a lot to charity and especially to family. Oh, and I've truly enjoyed working there.

What I've learned is that there is a probability curve. I chose an offer that had a high liklihood of buying me a down payment on a house but zero chance of buying me a whole house. In the end, this is a pattern I would repeat and I think if you can do go work for Uber, Pinterest, Airbnb, etc, where an IPO is very likely, go do it.

<comment><USER19> thanks for sharing! :)

</comment></comment><comment><USER20> In my experience and understanding, investors (almost) always get preferred shares with a liquidation preference. So unless you know what the preferences are, any such calculations are completely bogus. But even if you know them (and note that full cap tables are not commonly shared with employees in my experience) such calculations are still mostly bogus, because:

* You don't know what the preferences of future rounds will be. Your founders may say that they will never go above 1x or whatever, but the company may enter difficult waters and be forced to accept less beneficial terms.

* If you hold common shares in the presence of preferred shares with a liquidation preference, the payout function at acquisition/IPO will depend non-linearly on the selling price. There are steps and there will be a price below you will be 100% wiped out. So the incentives are not aligned. Preferred normally has all the voting rights, and for them 5% more or less on the acquisition price might not be a deal breaker. For for the common, 5% may be the difference between a nice down payment on a home or a 100% wipe out.

Based on this I would always negotiate a market rate salary at a startup company and value the options at $0, with 4 exceptions:

* You're offered to be a co-founder or one of the very first employee (< 3), with significant (~5%) equity. This is a risk that I personally might take.

* You're joining a late stage company and based on your industry knowledge you expect the company will do a successful IPO within 12 months. In essence you become a late stage investor in this scenario and your investment is your time.

* You're not in it for the money but instead want to change the world (and you don't mind someone else will make money based on your work if successful). For me personally a company like SpaceX could be in this category.

* You "trust" the founders to have your back and make sure your efforts will be rewarded whatever happens. This is a thin justification, but I could imagine doing it if you have been in business with the same team of founders for multiple times already.

</comment><comment><USER21> If you're being offered options in an early stage startup you need to ask at a minimum (and any half decent founder should answer):

1\. How many shares of the same class are in circulation

2\. What is the price per share at current company valuation

3\. How many shares of other classes are in circulation and whether these come with liquidation preferences

4\. If you will be required to exercise your options in the event of leaving the company and, if yes, how long you have to do it

5\. If you have the right to transfer your options (and later shares) to a third party. Unusual to have this right (unless you're transferring to immediate family) but good to know if you do have it.

6\. Ask to see a copy of the company's articles and/or shareholder agreement (to check how voting rights work, tag along & drag along rights, entitlement to quarterly management accounts, right to first refusal, what power the board has on deciding sales/transfers etc.)

That's in addition to being very clear on what the vesting terms are (assuming you are not being given all your options in one go).

</comment><comment><USER22> There actually IS a way to exercise after you leave without laying out cash + tax dollars today. Consider esofund.com, its a fund that will pay your exercise price and tax liability for a proportion of your upside in a good financial outcome. If it doesn't work out, well at least you didn't throw away your own cash. They're basically a vc that takes common stock in companies by getting rights to employee shares.

<comment><USER23> Only possible if you are able to sell your private shares without a liquidation event (IPO, acquisition) which is often not the case.

<comment><USER24> Not true. They don't own the shares, but you owe them a percentage of the upside, plus the money you borrowed to exercise and pay taxes. Not a bad deal if you're talking about a huge amount of money, and if you were in a questionable company like Square, etc.

</comment></comment></comment><comment><USER14> Great thread here and the original article has some excellent points.

I recently left a company and explored executing my options via a vehicle called ESO Fund (www.esofund.com). In the end I did not use them for different reasons, but their offer was reasonable.

Two general comments on stock options: \- Remember that bad things happen in companies in raising money. Your company could raise another round after you've executed your shares, and in addition to the dilution, you could also have an onerous term in that round - like a 2 or 3x liquidation preference - that will mean you are very, very unlikely to see any money.

\- Remember that companies don't have to have a liquidation event. I executed shares in a company I worked for in 2006. That tied up money in the company - and then nothing happened with the company for the last 9 years until this year I got a buy out offer on my shares at about 50% higher than I paid. Sounds great, except if you consider time. 50% return over a period of 9 years is certainly not a fail, but it also isn't a big win over putting that money into the general stock market.

<comment> finance-geek Seems like almost a total fail for me...50% over 9 years is about 5.5% return a year for a VERY risky asset. Something that risky warrants more. Also curious if that 50% return considers the upfront outlay, taxes upon grant, capital gains taxes, and the works...

<comment><USER14> It's 50% on top of initial investment and net of capital gains. But you're right - it's more or less a total fail. It was a small amount of stock, but right after I sold it I realized I probably should have just held it to see if they went public.

</comment></comment></comment><comment><USER25> It definitely seems like a bug that it's so difficult to realize any benefit until the company goes public, and when that happens -- if it happens at all -- is under the sole discretion of management. I guess there is a reason they're called golden handcuffs.

This problem was described well here:

[http://blog.samaltman.com/employee- equity](http://blog.samaltman.com/employee-equity)

and there are some interesting solutions. I wonder if any companies have taken this advice in the 20 months since it was given.

</comment><comment><USER26> I'm surprised people don't take the time to figure out what the options actually mean and negotiate some of the terms. When I have negotiated with startups I have paid for legal advice to help me figure out what language I needed in the option agreement (for example, a pinterest-style clause that prevents me from having to exercise within 3 months of leaving) and negotiated for the terms I felt were important. Just because the agreement is written to give you ISOs doesn't mean they will qualify for ISO tax treatment when you eventually exercise, so it is better to let you give up ISO treatment and convert to NSOs in order to avoid having to effectively forfeit vested options upon departure from the firm or face massive tax consequences. The pinterest- style structure should be standard.

<comment><USER27> Just curious, how difficult was it for you to find a qualified attorney, and how much did you spend? (I tried this approach once, but the legal advice was low quality and very basic.)

<comment><USER28> A friend referred me to an attorney at a well-known SV firm. She gave me a free consultation back and forth over email. By my own judgement as well as that of the founders and attorneys of my new company, the advice was good. It covered both my negotiation with the company as well as my personal tax planning and accounted for various possible outcomes. Following the advice, I learned more of the nitty gritty financial details of the company, got a calculated split of ISOs and NSOs (to early exercise), and also a decent cash bonus.

</comment></comment></comment><comment><USER29> I am considering an offer from an early stage startup. Salary is being dragged down ~40% under market due to stock options. The role is being a 'first key engineer' hire after the three co-founders. What kind of common-stock equity offer is 'average' in this case? 1%? 2%? 5%?

<comment><USER30> In my experience it's never a good idea to take a pay cut in lue of equity. Taking a pay cut because you like the product, the role, etc. are infinity better reasons than equity.

In my opinion a 40% pay cut and being one of the first 5 engineers warrants co-founder status.

<comment><USER31> It does not warrant cofounder status at all. So much more goes into being a cofounder than simply being one of the first x employees.

<comment><USER30> Well when someone is offered a 'key' engineering role it's basically a fancy way of saying 'you'll be building pretty much everything'. Couple that with the fact that it requires a 40% pay cut and you've got a situation that definitely warrants co-founder status.

<comment><USER31> Most founders go with no pay for quite some time. You can still be a co- founder and receive pay but being a co-founder conveys far more risk and responsibility than being one of the first x employees in the company. Even if you happen to be the person "building pretty much everything", it still does not justify being a co-founder.

If you wish to be a co-founder, you typically have to be willing to take more than 40% pay cut for much longer. You must be willing to defer your paycheck so that your other employees (who are usually on a paycut too) can get paid if funds get tight - this is even expected of most C _O employees in the company but the first ones to go are always the founder 's. You are usually involved in most fundraising activity _in addition to your other duties, whatever they may be* and customer support early on.

The list is quite long, I was once a highly entitled "engineer" until I built a few of my own companies. The dynamics are so much more complicated and tailored to each individual situation that it's disingenuous to lay out blanket statements the way most people in these comment threads have been doing.

Being a founder is brutal.

I'm not saying key engineers aren't entitled to good or fair treatment or that it is impossible to become a co-founder if you're #3 or #4 or #5, but I do not believe you're entitled to _founder_ status just because you're an early hire. Sometimes it can happen that way if you choose to take on those responsibilities and risk and negotiate that dynamic with the other founders - setting up achievement milestones and what-not.

Similarly: Just because you're a founder doesn't mean you're actually entitled to the role of C*O (though you may hold that position early on as it needs to be "filled" it can quickly out-grow you). Some can become those roles and some simply aren't capable of scaling with the needs of the company.

<comment><USER32> You're totally right! Without that guy who builds everything your company will do just fine...doing nothing and having nothing to sell....

just wow

...

Also, what risk? There has never in history of history been easier access to money than now, and never better terms. Hell, tell a stranger in palo alto you're an MIT dropout, and have a Stanford dropout friend, and they will practically write you a blank check.

<comment><USER31> Your thinking is clearly very black and white, also highly entitled - <USER3> common with engineers. There is no doubt that a product would not exist without the people to build it but an organization would not exist without the people to organize it.

Many roles in the company are invaluable. Not just the engineer.

It sounds like you've had a bad experience and I'm sorry if you have, but not all companies are "pointy haired bosses that take advantage of the underlings".

> Also, what risk?

You clearly have no idea.

> There has never in history of history been easier access to money than now, > and never better terms.

You still have no idea. I'm not even going to try.

> Hell, tell a stranger in palo alto you're an MIT dropout, and have a > Stanford dropout friend, and they will practically write you a blank check.

This is a pretty offensive statement and you've lost me entirely, your perspective is so far detached from reality that it makes a lot of sense why you're so upset, sarcastic, and frustrated. Instead of a self-righteous attitude, go build your own startup if it really is that easy and low risk.

If you have built your own startup and received a blank check and performed the feat [of building a startup] with no risk to yourself or your peers then I call bullshit or you're just internet trolling.

<comment><USER32> [https://medium.com/@tikhon/founders-it-s-not-1990-stop- treat...](https://medium.com/@tikhon/founders-it-s-not-1990-stop-treating- your-employees-like-it-is-523f48fe90cb#.ws2e25qra)

</comment></comment></comment></comment></comment></comment></comment></comment><comment><USER33> You don't have to hold the stock until IPO. If the company is doing good, finding a private buyer through a stock broker shouldn't be _that_ hard. Sure, you won't get the best deal, but it lets you cash out.

Also, if a private company grants you options and never gives you any options for liquidity (like buying the stock back when taking new investment etc) you should be really careful about overvaluing the options. Clearly the company wants to chain you down, not reward you.

<comment><USER4> Have you found a private buyer for stock? What was the experience like?

<comment><USER34> I have sold stock (exercised options) to a private buyer. I found them via sharespost. The experience was good. I paid 5% of the proceeds to sharespost.

</comment></comment></comment><comment><USER35> Another variable I once saw was options (subject to board approval) in the offer letter and then several _months_ later an approval of the options grant that had to be signed. In this second document, there was a clause saying they could fire the employee and take back the options à la Zynga, Skype, etc.

In that case, immediately discounting the value of my options by a quarter is reasonable since those kinds of terms being used for clawbacks is getting more common.

</comment><comment><USER36> As a founder who's been through a liquidation event, I have to say that stock options are a terrible way to reward employees. The tax issues alone (not to mention all the other stuff mentioned in this thread) are a huge pain for most ordinary people. The only reason companies use this is that there's no better alternative... Anyone ever encounter some other financial instrument that's possible to use in this situation?

<comment><USER37> Bonuses based on how well the company does.

I.e. $1,500 bonus per $MM in revenue, each year

<comment><USER38> These cause huge cyclical attrition and mess with everything every vest/payout. Also if that is written to the contract as a formula it is a huge reason to lay off old employees, because as the company grows one expects the MM to grow larger. If it isn't written into the contract it is a crappy way to reward the initial brave few as initial revenue will be negligible and their share will decrease as the company grows.

</comment></comment></comment><comment><USER39> It would be so much easier for everyone, if companies would IPO earlier. Evaluation of your option value would be straightforward, there is liquid market, no need to worry about investors preferences, ratchets, etc. Also the whole market gains a lot of efficiency if basic financials are public.

Not so long ago, companies used to IPO way earlier... Microsoft, Apple, Amazon...

<comment><USER40> Unfortunately, it appears that many startups have gotten their valuation ahead of their economics, so IPOing isn't an easy option for them because it would be a large down round. IIRC, most of the large tech ipos in the last year went public below their final private valuations. Though to be fair, the last investors often got ratchets.

This is a good read too

[http://thomasgr.tumblr.com/post/135710601255/the-pre-ipo- dip...](http://thomasgr.tumblr.com/post/135710601255/the-pre-ipo-dip-the- opposite-of-the-burst-of)

<comment><USER37> Yea not to mention the sarbanes oxley act, post-enron, that makes public company regulations obscenely difficult.

</comment></comment></comment><comment><USER41> Even when the maths is simple, few people seem to do the maths. The number of reasonably bright friends I have who say "I've got some equity, so if it goes big I'll make great money", but haven't actually sat down and calculated that "great money" is a one-off £50k astounds me.

<comment><USER33> The more common problem I see is the reverse: people do the math for the optimal scenario, see big numbers, and then assume that's how much the options are worth.

<comment><USER42> I agree. Stock options are a well-engineered exploit of employee optimism.

</comment></comment></comment><comment><USER43> Math is good. Philosophy is better.

Your salary is what you live on. Everything else is a bonus. As a salaried engineer I have received basically every 'extra' there is. Cash bonus. Equity bonus. Options. Restricted Stock Units. Overtime pay by the hour (seriously!)

In all cases I do not plan to get that money. I don't use it to pay rent or a mortgage. I don't use it to buy clothes or food. You might argue that is a luxury, but honestly if you can't afford your lifestyle _without_ the bonus, then what happens when there are bad times and you don't get the bonus?

I set this up so explicitly that I have a separate bank account for that money and when a bonus comes in it gets transferred away from the day to day account. This years vacation is paid for with last years bonus.

</comment><comment><USER44> One mistake I see people make quite often is failing to adequately research the reputation of a prospective employer and their executives. I've seen people accept offers because the option grant was marginally better at company A than company B.

There are so many things that can effect the outcome of an employee with options (subsequent funding rounds, liquidation preference, if and how the exit happens) that it often boils down to whether or not you believe you will be treated fairly.

</comment><comment><USER45> One thing I wish to know is whether it is possible to negotiate the terms so you have preference of liquidating some of your shares when company raises a round. Surely, the possibility of an IPO or an acquisition might be uncertain but another funding round seems a very plausible event.

One company, Atlassian, did raise one round solely to allow employees to vest their shares but I am not sure how common this is in Silicon Valley's Tech Culture.

</comment><comment><USER46> I've been through this before (15 years ago). As a "first engineer" as well. I was fully-vested in a fair deal. The start-up had been acquired outright by a large private co which gave a nice real world known valuation for the company and the new owners were entering a pre-IPO quiet period (we were told it would happen with few months). Exercising my options would net a 7 figure stake for at a cost of about six-months salary. I hadn't understood all the options complexities at the start but learned fast about this time thinking of selling some. Engineer #2 got a loan in order to exercise their similar options and got totally screwed as things slowly imploded. I never did exercise them thankfully. In another case my options as a early engineer (again fair enough terms) ended up actually worth actual money after a few rounds of dilution and conversions and sales ultimately to a public company. However it was a few K worth after 5 years of work on paper it had been variously valued up to high six figures. I know now that options are, as someone said elsewhere in the comments, "a variable odds lottery ticket".

</comment><comment><USER47> I've currently got around 60 days to exercise some options with a company. But I have not been told how many shares there are out there or anything about the company finances so I have no way to judge how much they might be worth even in the best case.

In the end though the amount that I can buy is so low that even if they are worth 10x what I'm paying for them it is not worth the paperwork and trouble.

<comment><USER48> The easiest thing to do is find out what the current strike price is and compare it to the strike price of your options. This will tell you ONE key metric for determining the stock's value and will help assist in estimating your tax liability.

The same is true at time of negotiation. You don't really need to know how many shares are outstanding if you have the strike price and an estimate for the company's growth. That is, you're investing $X dollars and expect it to raise by a multiple of Y.

</comment></comment><comment><USER49> This covers a lot of the more important things -- certainly to the individual. But one thing that you need to keep in mind in terms of predicting the actual value of the options, which is outlined in the "More ambitious questions" section is things like overhanging liquidation preferences, participation rights, downside protection for investors, etc. Ask these questions.

</comment><comment><USER50> > which pays me a SF salary despite me living in Montreal

I'm not sure what cost of living in Montreal is, but I'd be surprised that jvns is making less than 100k in SF. If Stripe were smart they'd increase her salary stat. Just based on her excellent blog posts and her insatiable curiosity, this is not an employee you want to lose.

<comment><USER4> (my after-tax salary -- I pay 40% income taxes or something? basically I'm saying my salary is less than 150k USD)

</comment></comment><comment><USER51> Why is it so hard to convert these to cash the same instant you exercise them? If there are some special terms attached to your share of the company that prevent you selling the shares directly, you could just make a (transferrable) derivatives contract with interested investor(s) where you pay them the dividends from the stock?

<comment><USER40> Every private company I've gotten an offer from includes, at minimum, a right of first refusal on selling shares. Some allow the company to prevent you from selling period. This isn't, afaik, entirely evil -- there are SEC regulations controlling the allowable number of shareholders for a company to stay private. I've also seen it mentioned that Etsy, amongst others, has fucked employees trying to leave by preventing them from selling shares.

</comment></comment><comment><USER52> Elaborating on early exercise. Employee can choose to pre-exercise ISOs soon after starting job (before vesting) and file 83b. In this case, the difference between strike price and FMV is $0 and hence tax realized is also $0. This also starts ticker for capital gains sooner and if the company gets sold/IPO after 1 year from date of exercise and 2 year from date of grant then long term capital gains will apply and not short-term capital gains which is taxed as ordinary income.

This obviously depends on the strike price on joining the company and how much money employee is okay to lose in case company goes bust. If not all, some ISOs can be early exercised.

In my case, I early exercised around 25% of ISOs soon after joining. In hind- sight I should have early exercised more as the company did go IPO around 2 years after I started...

<comment><USER53> "the difference between strike price and FMV is $0 and hence tax realized is also $0"

well, this is assuming your company's value hasn't increased since then. But I do agree it's usually an interesting move if you believe in the company since you'll pay taxes earlier.

</comment></comment><comment><USER54> I'd rather have the RSUs ([https://en.wikipedia.org/wiki/Restricted_stock](https://en.wikipedia.org/wiki/Restricted_stock)) that my company gives us, than stock options. A chunk of them vests each quarter, they allocate an appropriate fraction of that chunk to cover taxes, and the resulting shares are ours to hold or sell. No dilemma of when to exercise or whatever, no risk of being underwater.

My father once got stock options from Nortel Networks right before the dot-com bubble bust (sometime between 2000 and 2002). He exercised them, sold some to buy a car, but held onto the rest, had to pay a hefty tax bill, and then when the price nose-dived, they were worth less than what it had cost him in taxes.

</comment><comment><USER55> If you are considering a job that offers options/stock I think this is the most important thing to consider.

1\. Do the founders have a history of successful exits? 2\. If so, did all employees with stock get paid?

If either is no, you should consider options/stock worth $0

<comment><USER56> Some of the most successful exits in the tech industry were started by first time founders. I don't think that's a very good criterion.

</comment></comment><comment><USER57> Is it really that hard to find a buyer for private shares in a "good looking" startup? It almost sounds impossible, yet I talked to some people who said it's not that hard. I guess I have to find out..

<comment><USER58> There are tons of brokers that makes their living doing this. It's not necessarily hard, depending on how good price you want to hold out for, but it can take a lot of time and be unpredictable, because the buyers are not necessarily sitting around waiting and so it can depend on finding a broker that have the right kind of potential buyer on the books that they can contact.

I've sold shares same day in an unlisted company, and then a few weeks later called the broker to sell more and ended up taking several months to find a buyer, but on my end it wasn't "hard" \- it was just a matter of waiting it out.

<comment><USER34> I also had the same experience. Because there is no real market making entity, finding the two parties needed to make a trade can take unpredictable amount of time.

</comment></comment></comment><comment><USER24> There are some funds that some of my former coworkers talked to that will front all of the money to exercise your options, plus pay the taxes, in return for paying the money back for the above, plus 30% of the profits. You're basically borrowing the money to exercise and pay your taxes and then giving up 30% of the upside. It's seems like a good deal to me since you take on zero risk, especially if you're in that situation described in the blog post.

I won't advertise their name, but they seem legit and know several people that took them up on their offer.

</comment><comment><USER59> I have a single peeve with this otherwise excellent article: "My after-tax salary is less than $100,000 USD/year, so by definition it is impossible for me to exercise my options without borrowing money."

This fact isn't true "by definition". It's true "by arithmetic". We say a fact is true "by definition" if it isn't true for any other reason. [1]

[1]: [http://lesswrong.com/lw/nz/arguing_by_definition/](http://lesswrong.com/lw/nz/arguing_by_definition/)

<comment><USER60> Last I had options there were companies(etrade in my case IIRC) that will do the whole buy/sell for you; they flip them instantly and give you the cash. I suppose that depends on the type of options and how the company has it setup?

</comment></comment><comment><USER61> Every offer I've ever gotten that included an equity/options component omitted key information that I would have needed to have even a fuzzy understanding of the offers value. When I asked for details it was like pulling teeth to get the information if they would disclose it at all and often they would only do so verbally and not in writing. I turned them all down because that sort of thing leaves a bad taste in my mouth.

</comment><comment><USER62> Evaluating the value of stock options can also be done using the Black-Scholes model. Here's a blog post that explains more as it applies to startups: [http://cdixon.org/2009/08/18/options-on-early-stage- companie...](http://cdixon.org/2009/08/18/options-on-early-stage-companies/) .

</comment><comment><USER63> Most people don't have a clue how options really work, but are thrilled to get them... until they try to excise them.

Truth is companies give options to low level employees because it's cheaper than paying cash. Most employees don't do their homework to realize that in the vast majority of cases they'd probably be better off demanding cash.

</comment><comment><USER64> My first equity experience is going to be RSUs. They seem better in every way: you don't owe taxes in cash (they're withheld), you can't go upside down (zero strike price), and you don't need capital to begin with so your compensation does not depend on how wealthy you already are.

Why would anyone take options if they could get RSUs?

<comment><USER65> You have much higher leverage on options, and you don't take a tax hit until you sell them. That's assuming the price goes up significantly. That's basically the tradeoff.

</comment></comment><comment><USER66> This is a bit ridiculous.

Why do you need to pay taxes when exercising the options? At that point one did not made any profit and in fact you made an investment (you spent money and there's still high chance you might lose to that investment).

It would make much sense to be taxed when you sell the stock (and use the original option price you paid for the shares).

<comment><USER56> Just because you don't have cash doesn't mean you don't have an asset that has value. If I give you a house, you don't have cash, but you still have to pay taxes on the gift.

I do agree that there is some degree of ridiculosity and there should probably be some tax reform here, but that is the reasoning behind the current rules.

<comment><USER66> Sigh... it really needs to be reformed, you essentially can lose money twice on such investment.

</comment></comment></comment><comment><USER67> Is this a sensible approach:

You have offered me X ordinary shares which is y % of total outstanding.

I want a contract that guarantees me the same % of this class of shares, and the same % of any other more privileged class of shares, and I am given an opportunity to participate in every liquidation event pre public offering

Seems to cover many of the horrors people have hit?

<comment><USER68> Unless you're an irreplaceable employee, you won't get that. In particular, it's unreasonable to take the initial percentage and demand the same percentage of preferred shares (or venture debt convertible into shares at the lender option).

Many of these "horrors" are a reality of the angels and VCs protections that enable and are essential to the company financing. IOW, attempting to tunnel under those protections for employee benefit runs counter to the investor interests, sometimes to a degree that it would preclude investments entirely.

Even the liquidity provision is problematic. Suppose investor A wants to sell their stake to investor N in a private negotiated deal. Maybe fund A is collapsing. Are they obligated to tell you the terms of their negotiations? Obligated to also purchase some of your shares at your sole discretion? How would they even _know_ that you have such a provision?

<comment><USER67> VCs get dilution protection, why can't other "investors" who invest time and effort.

If that dilution protection is some other form than stated, well I need to read up on it.

But my general approach is that just because you are an employee not a capital investor does not mean you should just take whatever shit is doled out. Especially not these days.

That whole thread is about finding better terms and protection to take options on.

"They won't let you" is close to "shut up and take it". (Not the same but a bit too close for my ckmfort

<comment><USER68> I don't view it as "shut up and take it", but rather "here's what we're offering; would you like to take it?"

The most common form of dilution protection is the right to invest more cash in future rounds pro-rata. (So you can pay to stop being diluted.) That you _might_ be able to get if you hold shares, but you're going to need to pay cash at each round to avoid dilution. You won't realistically be able to get it as an option holder in the employee option pool, and as a non-accredited person (by the meaning of CFR Title 17.II§230.501), I'm not sure of the legality of investing cash to protect existing holdings from dilution. (I'm not saying it's not legal; I'm just not sure as I meet at least one of those tests.)

As both an employee of startups (in the past) and an angel investor (dabbler/dilettante), I can see both sides, but when I contemplate writing a check to "2 founders, an idea, and a powerpoint deck", you can imagine that many provisions of convertible/venture debt exist to make that make a tiny bit more sense and provide some limited downside protection for the "indefinitely horizontal" company trajectory.

Once I invest, I have very limited input into how the CEO runs the company, but I'd advise a CEO to pass on a mid or late stage employee who is too much of a troublemaker about their options terms. Realistically, the company should not be negotiating and drafting custom options terms per employee and an employee who demands such is probably a better fit for someplace else. Quite literally, the terms of the company option plan are (often) set and modifying them is nowhere near the same as giving a signing bonus, flexible hours, a few extra vacation days, work from home on Wednesdays, or a different salary/bonus amount.

<comment><USER67> I may have been more ... Assertive .. than I meant.

Interesting. The right to invest as dilution protection I had not remembered (Is it stripe that surprised everyone by giving investors right to invest at the previous round prices?)

I suppose that what I am trying to protect against is to not see dilution occur worse than that of founders. But then if you don't trust the founders that much at the outset, don't join.

So, perhaps better advice is take the money not the options, and if you want a lottery ticket, start your own company.

I think I will give up and form a co-operative.

</comment></comment></comment></comment></comment><comment><USER69> This is very useful! I accepted an offer with few options and low salary at a start up after I graduated from my masters, and only realised what I have missed out on a couple of years later. I left with fewer options than people who joined years after me. Wish I knew a bit more about startups and their options earlier.

</comment><comment><USER70> What protects the stock from being diluted since presumably it has no or insufficient voting rights?

<comment><USER49> Nothing. Stock will get diluted. Typically every 'Series' fundraise will add 10-20% option pool and dilute the company by another 10-20% of preferred shares. The 'idea' is you have a smaller piece of a larger pie.

Very incredible companies will raise at better terms and valuations and dilute more. This is very rare.

<comment><USER70> Indeed. In other, perhaps less "SV" companies, I've seen it happen where the CEO wants to bring in an associate as perhaps the COO, CTO, CFO or some other high level position. Obviously such a person won't just leave their "megacorp" job without some shares being offered to join the riskier venture. So they end up diluting the company just so that a certain % can be given to this new "super experienced and respected head". It is sold to the rest of the company that he will bring in new customers. What actually happens is almost nothing. No real value is created. Just expectations are created.

This can be the same with "fund raising". Just because the company has diluted itself and now has a few million in the bank... it still has to spend that money wisely and correctly in order to realise a genuine "the pie is now bigger than before" that the shareholders were expecting.

</comment></comment></comment><comment><USER71> This is an excellent article. Thank you.

The thing that is missing from all of these articles is, unfortunately, a tool to actually do these calculations. I am building such a tool. Happy to share (privately!) an early version. If you're interested, email is in my profile.

</comment><comment><USER72> I wonder what your company would do if you chose a short position with your options.

But I guess what you're given pretty much assume a long position.

The little I know of options (and how no human can never ever guess the strike price!).

</comment><comment><USER73> Silly question: Why startups insist on stock options? Why not just give out stock themselves in same quantities? I think doing that might make them more attractive if they are competing for talent.

</comment><comment><USER74> What prevents a company from issuing vested stock options with an anti- dilution clause to early employees? Has any company set the precedent? Would it scare investors away?

I'm very curious.

</comment><comment><USER75> Why do firms offer options as opposed to actual equity?

The way these options are structured plus US tax law basically means a lose - lose scenario for the employee.

<comment><USER8> I think some of it has to do with giving you either X stock or 2-4x Options...

If your company is growing every year, and the stock is liquid, Options are great. I know a fortune 1000 company that used to give people a bunch of options at bonus time, people loved it - bought houses, etc. Then the stock turned sideways, so they switched to 50% options, 50% shares (with the actual share count being option count / 4, to approximately take into account that shares are worth a lot more than options). The next year they flipped to 100% shares. No one would get mega rich with a small pile of shares, but everyone would have some money in the bank...

</comment></comment><comment><USER76> What's are the pros and cons of setting the strike price as $1? Is it intentional to inhibit employees from exercising their options?

<comment><USER77> In the US at least, the strike price for options in a private company is set at whatever price the last 409A valuation was. How this is done is a bit technical, and typically something done by a specialized professional accountant type.

At any rate, the younger and riskier a company is, the lower the 409A usually is, and the more legal wiggle room they have to keep it low so common stock option grants are worth more later on.

For public companies it's whatever the stock price is on the date the option grant is made. If it goes up, the options are worth money. In general, for public companies options are vastly more easy to understand and actually cash out.

</comment></comment><comment><USER78> I have always just asked this one simple question:

\- What is the price per share at current valuation?

I don't think it's has to be that complicated...

<comment><USER79> It's not that simple if there are multiple classes of shares, particularly if some have liquidation preferences attached.

<comment><USER80> Yep, quick example -- company valued at $300M, 150M shares outstanding, options should be worth $2/share, right?

Except if that company raised $100M to get that valuation, the preferred shares will certainly have at least a 1x preference. If they are fully- participating, the new math world make the shares worth ($300-$100) / 150M or $1.33/share.

In round numbers, I worked for a similar company but they had to take a terrible down round post-GFC with 3x participating preferred. In that case the common options would literally be worth $0.

</comment></comment></comment><comment><USER81> As I compete to hire engineers, I've found myself in the role of providing counsel to many younger candidates we see about alternative opportunities they're considering. Outside the large tech-cos, they're usually considering joining a startup with a lower salary and some number of options for equity.

Our company is a wholly-owned subsidiary of a private holding company and does not offer equity ownership. As an alternative to equity options, we have bonus plans based on performance, both annual as well as long-term. We make estimations about overall company performance on a few metrics in order to provide what amounts to a range of values for how those plans apply to a specific candidate's role with us.

But I get a lot of questions about how to compare an offer from us to an offer from a startup that includes equity options as part of compensation. It's simple to compare salary, benefits, etc. But invariably, we get into conversations where candidates ask me how to value equity options they've received from another company.

First, I'm totally upfront about the fact that I'm: 1) not an expert, and 2) biased. But I am always honest with a candidate, and do everything I can to put myself in the shoes of an advisor.

Without looking at any offer details they have, I point them to the equation inputs: # of outstanding shares, preferred percentages, any liquidation preferences in play (need the multiple too), and the valuation. I'm sure there are other data points that could apply, but this information seems like table stakes. Nonetheless, if they have this information, they could at least gauge the value of their own equity options with exit scenarios at different levels.

But converting those scenarios to present-day value? This is the part where I always check myself, but I express that those equity options are almost certainly zero value. The outcome of a significant positive exit is always an outlier on the distribution curve, so appropriate discounting applies. That's the math part, which is as good as your assumptions and estimates allow.

The hardest part of those conversations is understanding how to justify assumptions in those calculations, such as how high profile a startup may be (and how that affects those assumptions.) I've been around long enough to have friends who were employees with numbers less than 30 at some very high-profile startups who had significant public exits, yet those employees made little to nothing. And to say nothing of those companies that simply didn't make it.

As creatives, our natural instincts drive us to believe we can create the value necessary for us to derive positive outcomes and ultimately benefit in these situations. The historical numbers simply don't represent that fact, and indeed show that outcome to be a rare occurrence. Good on you if that happens, but the odds are simply not in your favor.

As I conclude with most candidates, I tell them their mileage may vary and that they should absolutely seek the advice of someone entirely independent. Maybe as luck would have it, we have had a few candidates join us that were strongly leaning to accepting their startup offer. Several told me their reasoning -- they trusted my honesty with them. Who knows, maybe that's the _real value_ in equity options. :-)</comment>


Ask HN: Should I force myself to touch type? - <AUTHOR> Most of my daily activity revolves around coding, whether for work or for personal projects.
Thing is, I have never received a formal programming education and my typing style is very "improvised" - whatever my hands got used to while growing up using a PC - I only use my index finger on the right hand, and three fingers on the left hand.
Work gets done comfortable fast, but I wonder whether I should try and force myself to learn how to touch type properly. I tried giving it a shot for a while and if I choose to commit to it I can see myself having to go through lots of frustration due to slowness and clunkyness as my hands re-learn how to type.
Has anyone gone through a similar process? <comment><USER2> _Work gets done comfortable fast, but I wonder whether I should try and force myself to learn how to touch type properly. I tried giving it a shot for a while and if I choose to commit to it I can see myself having to go through lots of frustration due to slowness and clunkyness as my hands re-learn how to type._

Yes. If you don't do it now, you might not do it at all. Old habits are hard to break.

Here's a data point: [https://blog.codinghorror.com/we-are-typists-first- programme...](https://blog.codinghorror.com/we-are-typists-first-programmers- second/)

So if you can do [http://www.typeonline.co.uk/typingspeed.php](http://www.typeonline.co.uk/typingspeed.php) and get ~84wpm, you're at least as good as Jeff Atwood. But rather than compare yourself to others, it might be more helpful to ask yourself what your goals are.

I guess I feel strongly on this because of how revelatory and interesting the process of learning Vim was. It was sort of like re-discovering typing, and took a week of solid commitment (during which I got hardly anything done). But it'd be kind of silly to say that any of this stuff matters, per se. If you can enter text and you're comfortable with your speed, the only question that would seem to matter is: do you want to do it?

</comment><comment><USER3> Yes.

By learning to touch type you can keep your eyes focused on what you're writing rather than split between the screen and keyboard. I learned to touch type in my mid twenties. A friend convinced me of the benefits. He swore that I would lose productivity for only a couple of weeks. He was right. For the first 2-3 weeks I could not type as fast and had to force myself to not revert to my old ways. Which was _really_ hard. But it paid off. Now I type and never look at the keyboard, staying fully focused on the code/text I'm producing. Highly recommend it.

</comment><comment><USER4> I've seen folks type reasonably fast without knowing touch typing. Then again, I've always considered myself lucky that I learned this back in the late 80's in school. To me the main benefit is that I can usually type without looking at the keyboard most of the time. I'm guessing more than half of my keyboard glances now are finding things that are different on the Norwegian keyboard than was on American ones, but most folks aren't going to have that issue. I actually type slower if i'm using one hand, a few fingers, or if I'm looking at the keybaord.

As far as should you? Well, really personal preference. After some time, it might improve your speed or comfort, but then again, might not.

If you want to give it a try, go ahead and do it. I'd suggest games to learn - they may be a little silly, but they do the job with less frustration. Plus once you get the muscle memory set, there isn't nearly as much frustration. If you want to learn to not look, tape a piece of paper to the top of the keyboard so it covers your hands.

</comment><comment><USER5> > Work gets done comfortable fast, but I wonder whether I should try and force > myself to learn how to touch type properly.

In my opinion, no. It always amuses me when somebody wants to learn to touch- type just to learn touch-type. If one really needs it (i.e. writes a lot on a keyboard), they'll learn it soon enough just from the practice.

That said, you may grow with time using more of your fingers. It may even be because you _decided_ to try using those fingers that otherwise were idle (maybe one at a time; that was my case). But forcing yourself to learn? I would say it's not worth the hassle.

What actually matters to me is how fast I type and how accurate it is. You may want to check your results in some on-line test. If you have typing speed average or better, don't bother with specifically learning more.

</comment><comment><USER6> Not with touch typing directly, but years ago with ten-key and more recently a similar set of mental remappings to text editing using Emacs key combinations in lieu of CUI and the mouse.

My advice: don't force yourself. Just resolve to more frequently make a conscious effort to spend a bit of time touch typing. Maybe it's five minutes on a task requiring little flow. Maybe it's replying to email or typing into little boxes on the internet. Maybe it's working on a side project.

That way, productive work won't take a hit, there's calander scale time to develop _alternative habits_ , and it's not an exercise in self-flagellation.

Finally, it's ok to use different techniques at different times, there's no rule requiring a single mode of keyboard interactions.

Good luck.

<comment><AUTHOR> Thanks! I was thinking of starting practising with tools like typing.com every day, slowly upping practice time and taking weekly tests to gauge progress.

Then, once able to type regular sentences without banging my head on the desk, switch to touch type for short tasks, then side projects and then non-urgent work stuff.

Might track this and see how long it takes me to get comfortable with it.

<comment><USER6> That sounds reasonable. If it's going to be tracked, it could be blogged [1], and that might be a place to practice touch typing.

[1]: or tweeted or facebooked.

</comment></comment></comment><comment><USER7> When you start getting repetitive strain injuries you will wish you had made the effort to spread the strain over more fingers!

If it is the sort of thing that would work for you then "The Typing of the Dead" may help give immediate feedback for speed and accuracy.

[http://store.steampowered.com/app/246580/](http://store.steampowered.com/app/246580/)

</comment><comment><USER8> Read [http://steve-yegge.blogspot.com/2008/09/programmings- dirties...](http://steve-yegge.blogspot.com/2008/09/programmings-dirtiest- little-secret.html) .</comment>


Show HN: Best of Show HN - <AUTHOR> https://bestofshowhn.com/ <comment><USER2> I didn't realise I had 2 entries in the top 20…

My attention tends to navigate towards "Show HN" posts when I'm browsing HN. There's quite a few who actually use Bulma: Divjoy, Sinous, Open-Registry, Pino…

I'm really amazed by those hacking articles, like the retro video game console [1] or sorting 2 metric tons of Lego [2]. I've also come across very useful tools that have saved me lots of trouble, like this automatic subtitle synchronizer [3] or this iTunes replacement [4].

My favourite will still be "Spot the Drowning Child" [5], so incredibly useful.

[1]: [https://news.ycombinator.com/item?id=19393279](https://news.ycombinator.com/item?id=19393279) [2]: [https://news.ycombinator.com/item?id=14226889](https://news.ycombinator.com/item?id=14226889) [3]: [https://news.ycombinator.com/item?id=19248723](https://news.ycombinator.com/item?id=19248723) [4]: [https://news.ycombinator.com/item?id=16559715](https://news.ycombinator.com/item?id=16559715) [5]: [https://news.ycombinator.com/item?id=9962185](https://news.ycombinator.com/item?id=9962185)

<comment><AUTHOR> Wow, you did design in 4 mins. This is so cool man! I found you today through this website and thought it was brilliant idea! BTW it's #3 for all the time

</comment></comment><comment><AUTHOR> Hello HN!

I find myself spending time on Hacker News mostly in Show HN section, because I'm really curious what people around the world are making.

But I was wonder what were the best project were made for entire history of Show HN.

So I aggregated all Show HN posts, group them by most popular posts of a day, week, month, year (starting from 2008) by upvotes. Also it has search my popular tags or words.

And last but not least I found articles from most successful companies like Stripe, Dropbox, DuckDuckGo and Quora that started on Show HN including their old website using Way Back Machine.

Let me know what you think, I'd love feedback

<comment><USER3> Cool idea.

The filters could be better, ai also filters strings with "air"

Date filters would be cool. This year/month/week, last year/month/week etc.

<comment><AUTHOR> Fixed AI filter [http://www.localhost:3000/search?q=[ai]](http://www.localhost:3000/search?q=\[ai\])

<comment><USER4> [https://bestofshowhn.com/search?q=[ai]](https://bestofshowhn.com/search?q=\[ai\])

</comment></comment></comment></comment><comment><USER5> It's great fun to browse older ideas and projects and to see them in a new light. But you're missing out on lots of postings from 2008-2012 because people used to preface the title with _Ask HN: Review {our,my}{startup,app,site,webapp} ..._. The convention to always start with _Show HN_ seems to have come later.

Examples:

[https://hn.algolia.com/?query=%22Ask%20HN%3A%20Review%20our%...](https://hn.algolia.com/?query=%22Ask%20HN%3A%20Review%20our%22)

<comment><AUTHOR> Wow, I didn't know about it. Big thanks for this suggestions. I will add this filter soon. What do you think should be a name for this filter? Maybe something like "old posts"? :)

<comment><USER5> My suggestion would be to comingle them with the _Show HN_ submissions; they're the same thing with a different way of phrasing the title. If someone wants to look specifically for old posts, you have that covered with the year filter (where the reader can choose 2009, 2010, etc.) Also, note that a few submissions begin _Ask YC: Review {our,my}..._.

</comment></comment></comment><comment><USER6> I like to support or at least not be critical of anything where I haven't put in the work myself, so take this in the best spirit.

Is this substantially different from the built in search?

Example:

[https://hn.algolia.com/?q=SHOW+HN](https://hn.algolia.com/?q=SHOW+HN)

<comment><AUTHOR> The main idea of the website is that you don't need to type in the search bar each time. It's already have predefined filters and sorted by best of the day, week, month, year etc so you can take your phone and enjoy of reading while drinking your coffee (as I'm doing).

</comment></comment><comment><USER7> I think it's reasonably interesting that quite a few of the top posts are now dead projects.

</comment><comment><USER8> Mmmm filtering for Java shows javascript

[https://bestofshowhn.com/search?q=java](https://bestofshowhn.com/search?q=java)

<comment><AUTHOR> yeah, it's including all shorter words. I'm thinking how to solve it

<comment><AUTHOR> Fixed! [http://www.localhost:3000/search?q=[java]](http://www.localhost:3000/search?q=\[java\])

<comment><USER8> [https://bestofshowhn.com/search?q=[java]](https://bestofshowhn.com/search?q=\[java\]) ;)

</comment></comment></comment></comment><comment><USER9> The website is blocked by FortiGuard Web Filtering.

<comment><AUTHOR> Strange, maybe because of new domain? Or maybe I need to switch from flexible to full SLL in Cloudflare.

</comment></comment><comment><USER10> It would be cool to make a topic-specific Hackernews shin ranked by hotness for that topic. It'd be cool to focus in on topics I care about, not everything in Hackernews universe.

My theory is "What's hot in Elasticsearch" would seem to be better answered with hacker news than a subreddit...

(Hackernews Search is only sortable by date or votes, neither of which gets at hotness)

<comment><AUTHOR> what do you mean by "hotness"?

<comment><USER10> Some combination of time and votes where recent highly voted stuff comes first, but honestly I don't know. It's probably a formula that needs to be tweaked to what looks right

</comment></comment></comment><comment><AUTHOR> Added new category "Young Talents" showing posts from kids:

[https://bestofshowhn.com/curated/young- talents/](https://bestofshowhn.com/curated/young-talents/)

Very crazy to see when someone who is 14 years old who programmed an artificial intelligence bot.

</comment><comment><USER11> Such a neat idea! I wonder if you would mind a suggestion?

The bright orange color really hurts my eyes. When I open the site on either a desktop or mobile device, the entire screen is filled with bright orange with a white heading, and a bunch of white buttons with bright orange labels.

I realize that is probably the "official" HN color, but on HN it's just a tiny strip of bright orange at the top, not an entire screenful.

And on _my_ HN, the only bright orange I see is the Y logo. A long time ago I set my "topcolor" to "d0c8b5", which makes the top bar just a darker shade of the body background. The only time I see the bright orange top bar is on a non-logged-in device. For anyone else who finds the bright orange bar unpleasant, try that topcolor setting for some eye relief.

So my suggestion is to get rid of this bright orange completely, other than perhaps a small logo. Once I scroll down to the article listings, it looks fine, it's just that top section that is hard to look at. Thanks!

<comment><AUTHOR> Totally agree, I'm pretty bad with colors, so I started with monochrome palate and just before the launch (or even during the launch) I decided to change it to bright orange #fe6400 (save as HN navbar), I thought it would be more attractive, but it's more annoying for eyes. As you said in HN they've made tiny bar and I mead full header :D I will think about colors. Maybe you can suggest good website that have caml colors that not annoys you and you can spend a lot of time there?

<comment><USER11> I don't have a particular site to recommend, but my general feeling is to avoid bright colors. You'll never go wrong with simple black and white, like what you have now after you scroll down past the header and buttons.

OTOH, judging by the multiple downvotes, I may be a small minority here. Maybe other people like the page full of bright orange? Or maybe they didn't like my commenting on it.

Since no one saw fit to say what they didn't like about my comment, we may not find out which it was.

<comment><AUTHOR> I'm quite surprised that your comment was downvoted so much. Maybe people like this orange HN color? :D

<comment><USER11> To be honest, when I said "multiple" downvotes, it was probably just two. (Two is a multiple of _something_ , isn't it?)

Not a worry, I assume when people downvote a comment they have their own good reasons for it. In any case I am grateful that you found it helpful.

I will keep my eye out for sites that are clean and easy to read like you asked about and will follow up with any suggestions!

</comment></comment></comment></comment></comment><comment><USER12> It's ironic that the number one post of all time is a 0-day disclosure of a hack of HN that no longer works but to HN's credit was also never removed.

</comment><comment><USER13> This post upvotes itself.

</comment><comment> Pete-Codes Nice! Didn't realise I was no2 for this week. Awesome job!</comment>


Standing Desks – New startup, please give feedback - <AUTHOR> http://www.derskie.com <comment><USER2> This picture should have a human in it, as there is no sense of scale to it.

[http://cdn.shopify.com/s/files/1/1006/8978/products/1_5.jpg?...](http://cdn.shopify.com/s/files/1/1006/8978/products/1_5.jpg?v=1445075961)

</comment><comment><USER3> Scrolling sideways UI feels a bit weird. Mostly people go for scrolling up and down habitually.</comment>


Hardware Idea: The "Transmutable Hardware Input Device" - <AUTHOR> http://danzambonini.com/post/582708731/transmutable-hardware-input-device

<comment><USER2> Ergodex - <http://www.ergodex.com/mainpage.htm>

</comment><comment><USER3> It exists, and is easier to find than to find how to comment on his blog post...

<http://www.artlebedev.com/everything/optimus/></comment>


Why Is Toilet Paper Always White? - <AUTHOR> http://www.gizmodo.in/Gizmodo/Why-Is-Toilet-Paper-Always-White/articleshow/36436013.cms?utm_source=TOI&utm_medium=referral&utm_campaign=text_link_toiletpaper

<comment><USER2> So you know when to stop wiping.</comment>


Enforced Error Handling - <AUTHOR> http://250bpm.com/blog:68 <comment><USER2> _" I wonder whether there is an imperative language that enforces explicit handling of errors..."_

Java does that. If a method can throw an exception, you need to either handle the exception in a 'catch' block or throw it up the call stack for another method to handle. If you do neither, your code won't compile.

<comment><USER3> In the second paragraph the author seems to be only talking about errors as C and go have then, specifically as errors as values, not as exceptions. The important difference being that exceptions can occur anywhere and can lead to non explicit bailing out of a function.

Exceptions complect failure and control flow.

Judging from the docs (and the comments on the blog) it looks like rust might have largely what the author is looking for. Can anyone speak to that?

<comment><USER4> Rust handles errors in a functional-style way with std::result<T, E>. This is the same technique I use in F# code with a identically named discriminated union.

</comment></comment></comment><comment><USER5> Compiler-enforced discipline is the best kind of discipline. What the author wants is ML. Specifically, he wants:

        1. A statically typed language
        2. Exhaustive handling on the type of returned values
        3. To discourage impure functions or mutable state

Other languages (eg Rust, Haskell) fit these criteria as well. C might be forgiven given its age, but Go really has no excuse for such a weak type system.

</comment><comment><USER6> I'm not convinced by the fundamental premises the article opens with, i.e., that exceptions are only useful if you can tolerate a program crashing now and then, and that if you care about reliability you must use C-style error handling instead, checking everything at every level of the stack.

To my knowledge, there is no known system in mainstream use that reliably enforces that check-at-every-stage policy. Moreover, it is not immediately obvious how one would create such a system in a practically useful way, at least not without immediately running into the same sorts of issues commonly used to criticise exception handling in terms of keeping track of every possible failure mode that lower level code could indicate.

One thing we do know is that if programmers are not absolutely compelled to handle errors then sometimes they won't. The article itself cites an example from a very common library function widely called in C code among many other languages.

Another thing we know is that if programmers _are_ compelled to handle errors then they will cheat. Specifically, sometimes they will write useless code to satisfy the technical requirements of the language while not in fact doing anything useful to recover from the error. Java's checked exception mechanism is infamous for unintentionally promoting this sort of programming, and the paper cited by the post we're discussing specifically calls this out as a real world problem.

A third thing we do know is that sometimes there isn't anything useful you can do in response to some failures. Maybe your program simply won't be able to complete its task successfully under those circumstances and the best you can do is fail as gracefully as possible.

Given these constraints, systematic error handling at an architectural level seems to be the more promising strategy, and there seems little reason to prefer fine-grained, manual error checking code everywhere instead.

Exceptions are one way of implementing error handling at an architectural level, and to me they have always seemed a natural fit for sound functional decomposition in a software design. As a base case, you can always reduce to a situation where an operation either completes successfully or it fails and you don't distinguish between different types of failure. This is just the universal catch block or its equivalent in your language of choice. Anything more specific than that can be added as necessary. The one thing you can't do is have higher level code accidentally continue as if there is nothing wrong once lower level code has explicitly indicated that a failure has occurred.

Another architecture-level strategy is an Erlang idiom, where a failed process is effectively allowed to crash completely, with a separate supervisor process then detecting this and perhaps restarting the failed process to recover. This is somewhat analogous to the base case with exceptions and universal catch, in that normal execution can't inadvertently continue once a failure resulting in a crash happens.

It seems to me that either of these strategies, or any other systematic mechanism that imposes detection and recovery at an architectural scale, is likely to be more robust in the real world than a system that relies on manually checking everything. The latter, in the event of any oversight, _can_ allow higher level code to continue to operate as if nothing is wrong even after code at a lower level has explicitly determined that a failure has occurred, presumably carrying around an error that may subsequently manifest as a different kind of failure and ultimately a system fault. This seems to be exactly what the article was trying to argue against, yet the proposed strategy for dealing with errors, one manual level at a time, seems to be just about the worst way we know to avoid it.

<comment><USER7> > To my knowledge, there is no known system in mainstream use that reliably > enforces that check-at-every-stage policy.

I got the impression the author is talking about Haskell. In pure code, Haskell can behave exactly that way, and the checks don't even bother that much, they are easy to deal with.

Problem is, not even Haskell is purely that way. IO operations just throw exceptions just like in any other language.

<comment><USER6> It's true that error handling in pure computations tends to be easier than the general case.

A lot of the more tricky situations to deal with, IME, tend to be when you have acquired some resource but then for some unexpected reason the resource stops co-operating. Some of the most awkward problems then happen when you can't even clean up properly at that point, for example by deleting a temporary file or committing a pending transaction on a database, because of the failure, and so you wind up with some externally observable side effects of your program that can't be fixed.

Another awkward area is running out of system resources such as memory or processes/threads, which many high level programming languages aren't well equipped to handle gracefully. Lazy languages like Haskell are relatively vulnerable to thunks building up and consuming excessive resources, for example, and while there are practical tools for mitigating that problem up to a point, a lot of the neat theoretical models pretty much go out of the window if you really do hit a hard limit in a production system.

That all said, carrying error information within a monadic framework would be another good example of the kind of systematic error handling strategy I was talking about before.</comment></comment></comment>


Reading "Logicomix: An Epic Search for Truth" - <AUTHOR> http://www.charlespetzold.com/blog/2009/10/Reading-Logicomix-An-Epic-Search-for-Truth.html

<comment><USER2> Link to a review and some discussion at <http://news.ycombinator.com/item?id=846451></comment>


Bitcoin is peer-to-peer or it is nothing - <AUTHOR> https://www.reddit.com/r/Bitcoin/comments/brq1bk/bitcoin_is_peertopeer_or_it_is_nothing/ <comment><USER2> Link to the Medium article:

[https://medium.com/breez-technology/bitcoin-is-peer-to- peer-...](https://medium.com/breez-technology/bitcoin-is-peer-to-peer-or-it- is-nothing-3ec724c1c0e)</comment>


Feds Can Unlock Most Devices They Need to Get Into, FBI Admits - <AUTHOR> https://motherboard.vice.com/read/feds-can-unlock-most-devices-they-need-to-get-into-fbi-admits <comment><USER2> This is quite disheartening because if the FBI can get into devices, so can the bad guys. And the FBI doesn't seem too keen on working with the device makers to patch vulnerabilities.

It really sucks for those of us in industry to no longer having the support of our government in helping defend our tech and communications infrastructure. Why are we prioritizing offense over defense?</comment>


The Reason Why People Can't Write Well - <AUTHOR> https://www.inc.com/glenn-leibowitz/the-single-reason-why-people-cant-write-according-.html <comment><USER2> The headline itself is bad writing (the word "why" is superfluous).</comment>


Cost of Studying Abroad for an Indian Student - <AUTHOR> https://blog.paxcredit.com/cost-of-studying-abroad-for-indian-students-dd6c6c7be57a <comment><USER2> Does it offer forex card?

</comment><comment><USER3> Hong Kong?</comment>


Clothes That Produce Power - <AUTHOR> http://www.npr.org/templates/story/story.php?storyId=18952237 <comment><USER2> Hold on, I'm running outa juice, got to put on my power tie!</comment>


[project Critique] Gift Automation Service - <AUTHOR> http://www.gifthandler.com

<comment><AUTHOR> I'm looking for feedback on my latest project: www.gifthandler.com

Elevator Pitch: Receive reminder emails for upcoming events (birthdays, mother's day ...) which suggest the perfect gift and a personalized message based on how users described their gift recipients.

What I'm Looking for: Sign up for the service, test us out, sign up in the "Gift Yourself" section to give us some direction on picking out gifts for other people. I'm looking for design and usability feedback - I've only begun building the site over the past few weeks. I love the concept, but understand it still looks like middle school club's website.

Thanks so much YCombinator readers!</comment>


68 Business Ideas I Created for Seth's Alternative-MBA - <AUTHOR> http://alexkrupp.typepad.com/sensemaking/2009/02/68-free-business-ideas.html

<comment><AUTHOR> A few of these I've actually posted on HN before. Anyway, the full list is here:

<http://www.sixmonthmba.com/2009/02/999ideas.html>

(Hamster Burial Kits & 998 Other Business Ideas)</comment>


Rapid Decision-Making: What it is, why we like it, how to get the most out of it - <AUTHOR> https://www.bridgespan.org/insights/library/organizational-effectiveness/rapid-decision-making <comment><USER2> Peter Drucker's 1971 classic article "What we can learn from Japanese management" would prove to be an interesting read to think more thoroughly about the subject: [https://hbr.org/1971/03/what-we-can-learn-from-japanese- mana...](https://hbr.org/1971/03/what-we-can-learn-from-japanese-management)

It provides a very different perspective on what it means to take (effective) decisions in a participatory manner (depending on the scale/scope of the decision), while being organizationally agile in translating those decisions into action, with a natural harmony between the two.

It is interesting to compare/contrast with Amazon's obsession with "high velocity decision-making making", for example :-)

</comment><comment><USER3> Does anyone else feel the need to just shake their head in disbelief that some execs need an acronym and a whole system to just make a fucking decision?

I feel like I'm in Dilbert land here.

<comment><USER4> The more people there are involved in a decision, the longer that decision takes to be made. If you're in a large company, everyone has an opinion.

This framework is useful to explicitly determine who is and isn't in the decision making process.

In other words, it's a good way to nicely say... "Back the F off!" to people that don't need to be involved.

<comment><USER5> I often find it's also correlated with the number of people affected. If you start making decisions for the entire organization (as though that ever works) everybody has to be involved, because anybody no involved will see this new policy wielded as a weapon by the people who were involved.

I believe making decisions fast is much less about cutting down the number of deciders, and way more about cutting down the impact. Essentially, make local decisions.

</comment></comment></comment><comment><USER6> This is useful, even if it seems "manager-y". TL;DR: Let's say we need to decide on tabs vs spaces. Assign roles to people in the team/organization making the decision:

\- (R)ecommend: ensures everyone sticks to their role.

\- (A)gree: same as I, but can approve/disapprove the decision.

\- (P)erform: changes the code to tabs or spaces after the decision is made.

\- (I)input: gives input, consults, but has no say in the decision making.

\- (D)ecide: this person tells the P's whether it's gonna be tabs or spaces.

Let's see it in action:

Roger: "Should we use tabs or spaces?"

Alice: "Tabs are better because..."

Igor: "I use spaces, they are nice because..."

Ivan: "I use tabs, they are nice because..."

Derek: "Alright, let's use spaces"

Alice: "Well, actually..."

Derek: "Ok, well, tabs it is!"

Roger: "Alright, looks like we have the decision: it's tabs!"

Patrick: "<re-indents the code with tabs>"

<comment><USER7> In reality, Patrick reindents with spaces and everyone else forgets because most decisions are not meaningful decisions in the company.

I'd say about 95% of the decisions companies make do not move the needle, do not aggregate into moving the needle, and are easily determinable to not move the needle.

<comment><USER8> Agreed. Based on experience, unless decisions of this type is automated via a script or post build, people will resume what they are accustomed to.

<comment><USER7> While you're right for things like this, I meant that more broadly.

I suspect that it applies to build systems, languages, product development, etc.</comment></comment></comment></comment>


The emotional rollercoaster of entrepreneurship - <AUTHOR> http://scott-allison.net/2011/08/26/the-emotional-rollercoaster-of-entrepreneurship/

<comment><USER2> Pretty solid talk. Makes a lot of good points and helps you to realize that you're not the only one having a freak out every day. Definitely helped me to calm down. Worth the time to watch.

<comment><AUTHOR> I remember reading the original blog about this, and just breathing a huge sigh of relief. That was around 3 years ago, and I've been sharing it with people since.</comment></comment>