After the unraveling story of Good Technology, the tech workers are revealing a ‘word of caution’ in working at Silicon Valley’s hottest companies.
According to a recent news, the company was said to be worth $1.1 billion. And to everybody’s surprise the company was sold for just $425 Million to Blackberry. Finally, the workers ended up with stock worth just pennies.
Billionaire Investor Mark Cuban commented that: “Unless the company gets lucky, employees lose.”
What are the difficulties faced in such situation:
- Employees feel that they are taking slightly lower salaries in exchange for stock options.
- Many don’t realize that the investors have negotiated clauses make it hard for them to lose money, even if valuations crash.
- Concerns regarding the stock option when the employees decide to leave the company.
pc86 wrote: “There are tons of stories of completely incompetent and/or corrupt founders literally locking the door on employees,”
throwaway1223 said: “[It’s] a much better career move for non-founders to work for large established companies.”
There are now 140 so-called unicorns, privately-held companies valued at $1 billion or more. If those valuations crash, it’s the employees who would likely lose out — not the executives or investors.
Source: CNN Money