# At Bolt, We Just Did Som... ![rw-book-cover](https://pbs.twimg.com/profile_images/1594859441786175488/UGk0I_dz.jpg) ## Metadata - Author: [[@theryanking on Twitter]] - Full Title: At Bolt, We Just Did Som... - Category: #tweets - URL: https://twitter.com/theryanking/status/1493390167461224451 ## Highlights - At Bolt, we just did something radical. We rolled out THE MOST EMPLOYEE-FRIENDLY stock option program possible. … and I believe we’re the first tech company to ever do it. It's a BREAKTHROUGH and might be as big as 4 day work week. Let’s dive in 👇👇👇 ([View Tweet](https://twitter.com/theryanking/status/1493390167461224451)) - [I recommend reading this in full] ([View Tweet](https://twitter.com/theryanking/status/1493390169294127111)) - Traditionally, how employee options work is as follows: Employees get an option to purchase X stock at $Y price. After they depart the company, they have 3 months to come up with enough cash to “exercise the option”. ([View Tweet](https://twitter.com/theryanking/status/1493390170044964865)) - This puts employees in a TOUGH spot. Why? Three key reasons: 1/ Employees might not be able to come up with the cash to exercise, thus losing all their stock ([View Tweet](https://twitter.com/theryanking/status/1493390170875482114)) - 2/ The capital gains clock begins AFTER options are exercised, meaning employees have to wait at least a year to get capital gains tax benefits 3/ It creates "golden handcuffs" where employees who might otherwise leave are forced to stay because they can't exercise their options ([View Tweet](https://twitter.com/theryanking/status/1493390171819364353)) - Some companies have extended the exercise window to several years. (Although shockingly many of the big tech companies have stopped for some reason #TheMob.) ***We did this too at Bolt.*** This is GOOD but NOT GOOD ENOUGH. We took it TWO STEPS FURTHER ✊✊✊ ([View Tweet](https://twitter.com/theryanking/status/1493390172716740608)) - ~~ THE 1ST SECRET ~~ Key executives sometimes have a special arrangement with the company that few know about. They get to EARLY exercise meaning they are able to exercise their stock before it vests. ([View Tweet](https://twitter.com/theryanking/status/1493390173660405762)) - This means starting the capital gains clock early (a HUGE advantage). And by early exercising before the stock increases in value, they often save $$ in income taxes or Alternative Minimum Tax (AMT). ([View Tweet](https://twitter.com/theryanking/status/1493390174478286848)) - ~~ THE 2ND SECRET ~~ Sometimes the company gives these executives LOANS to exercise their options. This means that the executives don’t have to come up with the cash today. i.e. NOTHING out of pocket! ([View Tweet](https://twitter.com/theryanking/status/1493390179490570241)) - SO I ASKED THE QUESTION: WHY NOT DO THIS FOR EVERY EMPLOYEE??? ([View Tweet](https://twitter.com/theryanking/status/1493390180400652294)) - Here were the answers I got: 1. It’s never been done before!!! 2. It deprives the company of exercise capital. 3. It will take a lot of overhead and paperwork to do it right…  4. Are you sure you want to do something this good for ALL of your employees?? ([View Tweet](https://twitter.com/theryanking/status/1493390181302476809)) - My response: 1. Never been done before??? That’s an APPEAL not a drawback! 2. The employee benefit far outweighs the cost. 2. I’ll pay for ANY amount of overhead if there are benefits to my employees. 3. UHH… YES! ([View Tweet](https://twitter.com/theryanking/status/1493390182166507520)) - Thankfully at Bolt we have a forward-thinking Board. And a forward-thinking legal team. Both are CRITICAL. They all quickly rallied behind this concept and went to work 💪 ([View Tweet](https://twitter.com/theryanking/status/1493390182996926465)) - Here's how the mechanics play out: ([View Tweet](https://twitter.com/theryanking/status/1493390183965904905)) - > There IS risk to the employee; they now have a real loan outstanding and 100% personal recourse, so if the common stock becomes less than exercise price, their personal assets are on the hook ([View Tweet](https://twitter.com/theryanking/status/1493390184897032201)) - > Therefore, we made sure to give every employee ample time to read about the pros and cons of this decision, including learning about all the risks in the business, and we gave every employee a $300 stipend to consult a financial advisor during the implementation process. ([View Tweet](https://twitter.com/theryanking/status/1493390185748434950)) - > Implementing the program for employees that already had options had to be done as a formal tender offer to comply with securities laws, because some employees had to opt in to amend existing option grants. ([View Tweet](https://twitter.com/theryanking/status/1493390186562134020)) - > After the initial implementation, on a go-forward basis we now offer every employee early-exercise and an exercise loan from the start of their employment with Bolt. ([View Tweet](https://twitter.com/theryanking/status/1493390187363282945)) - The outcome: > Every employee now has the same privileges as the founder and executives > Our team could not have been more grateful > Over half of Bolters eligible to receive this benefit decided to move forward with BOTH early exercise and loans during our tender offer. ([View Tweet](https://twitter.com/theryanking/status/1493390188281745408)) - And, regardless of deciding to use the benefit or not, everyone is eligible to receive long-term exercise windows 🥳🥳🥳 ([View Tweet](https://twitter.com/theryanking/status/1493390189221269504)) - I strongly recommend that more companies do this 🚀🚀🚀 It has some overhead but here’s the kicker… Because the loans go toward paying the company for its stock, the loans are CASHLESS. It costs the company nothing out of pocket! ([View Tweet](https://twitter.com/theryanking/status/1493390189984727048)) - Employees take risk since the loans are 100% personal recourse. So the EARLIER in the company’s life cycle you do this, the better it is ✨ I.e. If you are a Seed thru Series B company, this is a NO-BRAINER. ([View Tweet](https://twitter.com/theryanking/status/1493390190970351617)) - At Bolt, we did it as a Series D company ⚡⚡⚡ If your company has a strong growth trajectory, the benefits to your team from this program can be extraordinary. ([View Tweet](https://twitter.com/theryanking/status/1493390191951851520)) - Where did this come from? At Bolt, we think fearlessly and put people first 🧑‍🤝‍🧑 This has driven Conscious Culture (https://t.co/7XAGtdSnhp), 4-day workweek (https://t.co/0YE5CxL2uS), and so many other first-of-its-kind programs. This program is just another example. ([View Tweet](https://twitter.com/theryanking/status/1493390192761360385)) - In short, I believe we simply CARE more about our employees than most. When you *care enough*, you are willing to ask *tough questions*. At Bolt, we’re always committed to asking ourselves the tough questions. Especially when it comes to our people 🤝 ([View Tweet](https://twitter.com/theryanking/status/1493390193642151937)) - Alright, that’s all for now! I truly believe and hope that this becomes the DEFAULT for any company that leverages stock options. The Old-School Mob VCs won’t like it 💀💀💀 But it’s incumbent on founders and forward-thinking VCs to stand up and do what’s right ☀️ ([View Tweet](https://twitter.com/theryanking/status/1493390194468433921)) - If you liked this, give me a follow. I’ve built one unicorn and one decacorn and tweet radical new ideas on how to build startups. My success has come by always putting my people first. ([View Tweet](https://twitter.com/theryanking/status/1493390195269554178)) - And finally, this is Conscious Culture at work. That's what we're all about. Check out more at: https://t.co/7XAGtdSnhp If you have a startup, please sign the pledge and join the movement! Keep fighting the good fight and see you soon ✊ #WAGMI ([View Tweet](https://twitter.com/theryanking/status/1493390196083240961)) - VCs will say that this is a disaster. But they’ll happily do this for key execs at their companies. This happens at nearly EVERY startup. Why? Execs want this benefit. But for some reason VCs don’t want employees to have even the CHOICE to make their own educated decision. ([View Tweet](https://twitter.com/theryanking/status/1493613402366922760))