Tag Archives: career planning


WhatsApp: What an Acquisition Means for Employees

The announcement that Facebook is buying WhatsApp for $19 billion generated a lot of interest. The most popular question we received is what does the acquisition mean for the employees financially. IPOs tend to get all the headlines, but in many cases technology companies are acquired. This post will walk through the economics of an acquisition and how it affects all the parties involved. The Terms of the Deal From what I have read, Facebook will acquire WhatsApp for $4 billion in cash and approximately $12 billion worth of Facebook shares. In addition Facebook will grant $3 billion in RSUs to founders and employees that will vest over the next four years. I do not have any special insight into […]

The 14 Crucial Questions About Stock Options

Ask These 12 Questions About Your Options

In April 2012 I wrote a blog post titled The 12 Crucial Questions About Stock Options. It was meant to be a comprehensive list of option-related questions you need to ask when you receive an offer to join a private company. Based on the outstanding feedback I received from our readers on this and subsequent posts about options, I’m now expanding the original post a bit. I’ve done just a little updating and posed two new questions – hence the slight title change: The 14 Crucial Questions About Stock Options. Next time someone offers you 100,000 options to join their company, don’t get too excited. Over my 30-year career in Silicon Valley, I’ve watched many employees fall into the trap […]

100 Career Launching Technology Companies

If there is one thing we have learned from Wealthfront’s clients and our own experience in Silicon Valley, it is that picking the right place to work is the key to success. Getting equity in a mid-size, high-growth company is one of the best ways to launch your technology career and perhaps generate some wealth in the process. So today, we are proud to announce Wealthfront’s list of 100 Career Launching Technology Companies, an integral part of our first eBook. Compiled through a survey of top venture capitalists, all meet our criteria of being mid-size high-growth companies. We believe these are the companies that will generate the greatest career opportunities and the most significant potential for equity wealth in the […]

How Long Should You Stay At Your Job?

Over the years many people who have been granted options or RSUs have asked me for advice as to how long they should stay at their employer. As with most questions the answer is it depends. It depends on your happiness, the company’s prospects and your career path. For many people, four years seems to be about the right span of time. It’s no coincidence vesting periods for most companies are four years, but your decision to stay at a job should not be driven by your vesting schedule. Don’t job hop, but don’t be miserable, either People who are interested in maximizing the diversification of their private company option or RSU portfolios tend to only stay at each company […]

The Advice You Need, Not The Advice You Want

Last week’s post, You Need Equity To Live In Silicon Valley, generated quite a bit of emotion from our readers. A number of people missed the point of the post, which explains the economics of living in Silicon Valley. We pointed out that it’s hard to make the numbers work if you don’t own equity in a business that could be worth something in the future. Unfortunately a number of people misinterpreted the article as a condemnation of Silicon Valley. Real estate is expensive in the Valley because so much wealth is created here. You can waste your time making a value judgment about whether it’s good or bad that the wealth we create, combined with a low inventory, drives […]

You Need Equity To Live In Silicon Valley

The other day we were modeling our typical client’s spending when we realized something disturbing – an average Bay Area-based young couple has to own equity in a business if they hope to send their kids to a good university and be able to retire well. Investing well alone can’t get you there. Our analysis found you need to work for at least one company where your equity stake can generate at least a few hundred thousand dollars after tax to make your economics work in the Bay Area. The problem is the hole that opens up in a typical couple’s budget when they are in their late 30s. Three big pressures converge then: the mortgage on your expensive Bay […]

Should You Get An MBA?

If you’re considering an MBA, you face two separate but related questions: Is the degree worth it? And, How will I pay? They are important questions because so many people, including many of our clients, consider going back to school when they want to change careers. But an MBA isn’t an automatic ticket to success, and it carries a high price. A full-time MBA at a top-ranked school costs between $96,000 and $127,000 in 2011, according to Businessweek. The costs at second-tier institutions (many of them big state schools) are $30,000-$40,000 less, but that’s still hefty. The price of school is only the beginning. The opportunity costs of forgoing two years of salary and career advancement are likely to be […]

How To Dig Out From A Career Failure

When I entered the venture capital business in 1982, Route 128 in Boston was as much a breeding ground for startups as Silicon Valley. That is no longer the case. I believe the Valley’s tolerance for failure allowed it to overtake Boston as the world’s technology center. In the Valley, you’re respected for taking a risk even when you fail. In Boston, like most everywhere else in the world, you’re thought to be stupid if you fail. Unfortunately many young people have misinterpreted the Valley’s tolerance for failure as a desire for it. I think of this when former students come by my home office to ask for advice after their startups have failed. First step on the ladder I […]

Why Your 401(k) Plan Sucks

A recent study found that the average fee on a 401(k) retirement plan was an appalling .93% of assets. The fees in the most expensive 10% of plans were even more shocking: 1.72% of assets.  That’s huge in an environment where most people hope to earn annual returns of 6% before fees. The average 401(k), meanwhile, offers 15-20 choices of funds, which have higher expense ratios than those you would find if you were buying through a brokerage for your IRA. A typical lineup: Many actively managed mutual funds, a handful of passively managed index funds, and very few ETFs. If you’re an educated investor, this sounds familiar. You always suspected you were paying a lot in fees, even though […]

Manage Vested RSUs Like A Cash Bonus & Consider Selling

If your company gave you a year-end bonus of $100,000, would you use all of it to buy your company’s stock? Hell, no. Yet, scores of our clients who own restricted stock units and work for Facebook or Google effectively have. You see, restricted stock units (RSUs) are taxed differently than stock options, and many employees who receive RSUs don’t understand the implications. Stock options have a tax advantage: they are taxed when you exercise, so you might have an incentive to sell the following year and take the gain or loss. Not so with RSUs. They are taxed at the time they are vested, not when you sell. Facebook, for instance, even withholds the taxes due on RSUs by […]