Data from 75% of all U.S. unicorns shows how much is left on the table by company employees
Secfi, the first equity planning platform helping startup employees navigate financial decisions from offer to IPO, published the first-ever State of Stock Options Report. Secfi works with employees from 75% of all U.S. unicorns including Airbnb, DoorDash, and Snowflake, helping them understand, maximize and unlock the value of their equity. Secfi reports over $8.2 billion in employee equity on the platform.
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“Options comprise a large portion of startup compensation packages”
2020 has been the most active year for U.S. IPOs, with a record 402 companies going public. 81% more than debuted in 2019 and higher than the IPO craze of the 2000 dot-com-boom which had 397.
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Secfi’s first-ever State of Stock Options Report analyzes how startup employees at companies like DoorDash, Snowflake, and Airbnb managed their stock options. Key findings include:
- Startup employees left $4.9 billion on the table by not exercising their pre-IPO stock options.
- Companies with the greatest number of unexercised stock options at the time of IPO included Snowflake, Airbnb, DoorDash, Unity, and Palantir.
- The Unaffordability Factor: On average, the cost to exercise stock options is $500k, nearly 2x the annual Household Income of these employees.
- The Surprise Factor: 85% of exercise costs are tax, making exercising 6.6x more expensive than the options themselves.
- For companies with a 409a of $10B+, the exercise cost skyrockets to 5.5x annual Household Income.
“Options comprise a large portion of startup compensation packages,” said Frederik Mijnhardt, COO of Secfi. “Employees need to understand that with stock options inaction is a choice. Planning ahead and exercising early can allow them to make the most of their options.”