Cooper: Early employees bypass the 90-day exercise issue via Section 83(b)
Scott Kupor · a16z Podcast | Beyond One Size Fits All for Startup Employee Options · Jan 2, 2019 · at 7:06
Scott Cooper, partner at Andreessen Horowitz, explains how tax choices like Section 83(b) early exercise mitigate option expiration problems for early startup employees.
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“The other thing that the early employees typically have available to them is what's called 83 B, which allows them to essentially early exercise their options when the strike price is still very low and therefore the cash out of pocket required to do so is relatively minimal. And they also don't have a tax of tax event at that point in time. So they, what often happens for early employees is they eliminate this 90 day exit window issue because they've already early exercise their stock at a point where the stock price was cheap enough that it was, you know, financially viable for most people to do so.”
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