Amy, RE: I have a question: setting aside appearances, between the two (refresh vs reprice), isn't a reprice actually better for us investors than a refresh? (I'm asking.) A refresh takes away shares, while a reprice doesn't. Right?
In theory, perhaps. In reality there is no difference. In a refresh, while it might "take away" shares, the old, unrepriced options aren't going to get exercised anyway, so they're irrelevant.
What do privately held startups generally do? Reprices or refreshes? (and which one is more ethical for a private firm)
For a privately held startup, valuation is a lot more uncertain. If for whatever reason a reprice/refresh is necessary, I'd just as soon reprice. It keeps things simpler, in my mind. It all depends on what's necessary to keep the workforce happy and stable.
As far as ethics are concerned, as long as the junior employees get as good or better deal than the founders and senior employees, things are OK in my book. |
