Resources for insight and
inspiration
Guides
Insights
Federal Judge Strikes Down FTC’s Proposed Ban on Non-Competes
A federal court has struck down the FTC's proposed ban on non-compete agreements, allowing employers to continue enforcing these contracts under state law. While the ruling maintains the status quo, employers should review their agreements for compliance and stay informed about potential future changes to non-compete regulations
California’s New Workplace Violence Prevention Plan Law: SB 553
California’s new Senate Bill 553 (SB 553) requires businesses to implement workplace violence prevention plans. Designed to enhance workplace safety, SB 553 mandates written plans, employee training, and reporting procedures. Staying compliant helps protect your employees and fosters a safer work environment.
Should Your Startup Join an Accelerator or Incubator?
Deciding whether to join a startup accelerator or incubator is a crucial step for early-stage companies. Both offer access to mentorship, resources, and potential funding, but they serve different purposes. Accelerators focus on rapid growth with structured programs, while incubators provide a more nurturing environment for developing business ideas.
FAQs
Open allDoes the size of an option pool affect the acquisition price?
Yes. A larger pool can dilute per-share value, which impacts how acquisition proceeds are distributed among shareholders and option holders.
How can founders protect their team during an acquisition?
Founders can negotiate for vesting acceleration, retention bonuses, or favorable conversion terms to ensure employees benefit from the deal.
Do employees lose unvested stock options during an acquisition?
Not always. Depending on the agreement, unvested options may continue vesting, accelerate, or be canceled and replaced with new grants.
What typically happens to option pools when a company is acquired?
Option pools may either remain under the existing plan with the same vesting schedules or be converted into the acquiring company’s plan under a conversion ratio.
Can a company use both ISOs and NSOs?
Yes. Many startups issue ISOs to employees and NSOs to contractors, advisors, or employees exceeding ISO limits.
Do ISOs always avoid taxes at exercise?
Not entirely. While ISOs aren’t subject to ordinary income tax at exercise, they can trigger Alternative Minimum Tax (AMT).
Why do companies offer NSOs if ISOs have better tax benefits?
NSOs provide flexibility, fewer restrictions, and tax deductions for the company. They’re also the only option for contractors, advisors, directors, and international hires.
What is the main difference between NSOs and ISOs?
ISOs qualify for favorable tax treatment but can only be granted to employees, while NSOs are more flexible and can be granted to a broader range of contributors.
What is an 83(b) election and how does it relate to options?
An 83(b) election allows employees with early-exercised options to pay taxes at grant, potentially reducing future tax liability if the stock increases in value.
Can I exercise options after leaving a company?
Yes, but typically only within 90 days unless your company offers an extended exercise window. Check your grant agreement.
Do stock options always have value?
No. Stock options only create value if the company’s market value exceeds the strike price. Many startup options expire worthless.
What’s the main difference between ISOs and NSOs?
ISOs offer potential tax advantages but are only for employees, while NSOs are more flexible but taxed as ordinary income at exercise.
How long do warrants usually last?
Most warrants have terms ranging from 1–10 years, depending on whether they’re tied to debt financing, partnerships, or strategic transactions.
Why would a startup issue warrants instead of stock?
Warrants allow companies to attract investors or lenders by offering future upside without immediate ownership transfer or dilution.
Do warrants cause dilution?
Yes. If exercised, warrants increase the total number of outstanding shares, which dilutes existing shareholders’ ownership percentages.