Stock Option Expiration: A Ten-Year Trap for Startup Employees
Stock options granted to startup employees typically expire after ten years, creating a silent but devastating financial trap even when the underlying company succeeds. Without proactive management, employees can lose millions in option value through expiration, and departure from the company accelerates this timeline to just 90 days. The article outlines six strategies to mitigate this risk, from exercising options early to leveraging specialist funds or company liquidity programs.
Metrics in this report
4years
historical average
Pre-2010 startup exit timelines
2.08%
monthly rate
Company buyback right reduction in early exercise (1/48th per month over 48 months)
4years
standard
Silicon Valley startup option grant vesting schedules
90days
typical
After employee resignation or termination
30days
maximum
After option grant to avoid taxation at exercise
10years
standard
Silicon Valley stock option plans from grant date