Great article. To your side note - Yes Andrew could theoretically exercise now, but he would have to come up with $328MM in cash in order to do it. Banks won't lend against unexercised stock options, even for public companies. So the only way for him to get that much money (other than robbing the bank) would be to "cashlessly exercise" or sell stock to get the funds he needs to exercise his remaining stock. Depending on the 10B5-1 trading plan, they may force everyone to do this anyways. If he could rewind the clock (hindsight being 20/20), another option to fund his original $268k bill would be through private stock financing. In addition to SecFi, there's also Quid (my employer), LiquidStock, and ESO Fund who specialize in these types of financings.

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Oct 16·edited Oct 16

In fairness, there are two other considerations:

1. This is a very easy post-facto analysis. If he had had the company loan himself the money in 2015, and the growth had not provided a billion-dollar exit, or if preferences from further fundraising plus a weaker outcome had made his stock valueless, he would be on the hook for the loan. Even if the company forgave the loan, that would be considered income and he would have owed taxes on the forgiven loan.

2. The idea that it is "a loss" to pay taxes is a deeply selfish message.

I have been on both sides of this issue - exercising early and ending up with worthless shares or exercising late and having a big tax bill. And I know people who have lost or are losing their homes because they exercised options during the COVID ecom boom and now the shares are essentially valueless.

Not to say he made the right choice, but at least tell the whole story. Maybe "$125M choice" instead of "$125M mistake"

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