Incentive Stock Options (ISOs) apparently have a 10 year expiration window on them. If you were granted ISOs in 2010 but did not exercise them, you may have less than a year remaining to do so before they are lost forever.
You could exercise them, but for an early employee at a company like Airbnb that may mean literally millions of dollars in taxes that would have to be paid on an asset that can’t be sold, one that is still speculative in nature.
This doesn’t just apply to ISOs, either. I’ve learned from friends similar stage companies that even RSUs in a private company have some sort of expiration window on them, meaning if the company doesn’t IPO before that date those shares can also be lost.
There are many ways for startup employees to be screwed over on equity, especially when the company seems to be delaying IPO as long as they possibly can.
If the options are expiring, the company can choose to 1) foot the tax bill for the employee via payment or buyback, or 2) reissue the options as RSUs. Only some companies make that choice, but it's certainly legally possible to work through the 10-year legal expiration for ISOs.
You could exercise them, but for an early employee at a company like Airbnb that may mean literally millions of dollars in taxes that would have to be paid on an asset that can’t be sold, one that is still speculative in nature.
This doesn’t just apply to ISOs, either. I’ve learned from friends similar stage companies that even RSUs in a private company have some sort of expiration window on them, meaning if the company doesn’t IPO before that date those shares can also be lost.
There are many ways for startup employees to be screwed over on equity, especially when the company seems to be delaying IPO as long as they possibly can.