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Equities: I've been at a startup for 4 years, & promised equity but never received it. Company now profitable. What pitfalls should I avoid when pushing for it?
JC
JC
Jason Cohen, Founder at WP Engine answered:

You might be somewhat in trouble. You'll want to consult a lawyer, not to be adversarial, but rather to ensure you do things that are legal and are best from a tax-consequence perspective.

You can't back-date option grants or stock grants, for example. There are recent scandals reinforcing that statement. And if you don't back-date, your stock (or options) is worth something now, and might even have to get a 409A to ensure it's valued properly. (That's a 3rd-party stock valuation report, typically costs $10k-$30k, which companies with ESOPs are required by law to do annually, but I wouldn't be surprised if this company hasn't yet.)

There's all sort of other boogers which you couldn't even know about. For example, if an outside party made an informal written offer to buy the company, even if it went nowhere after that, that will change the 409A valuation.

So this is why, in short, I'm giving you the unsatisfactory answer that you'll have to use a lawyer to make sure everything is done properly.

This is, sadly, a object lesson in getting paperwork done properly from the start. I'm sorry to be the bearer of bad news!

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