Re: Hard Lessons Learned (for the entrepreneurs out there)

From: Gordon Mohr (gojomo@usa.net)
Date: Mon Apr 02 2001 - 22:31:06 PDT


> Okay, so here's what I know. This advice and $4 will get you a grande mocha
> frappacino at Starbucks.

Hey! This advice is worth hundreds of thousands of dollars. Don't
sell it short!

> * structure your option plans so they can be early-exercised
> * file your 83(b) elections ASAP
> * make sure you're okay to net exercise
> * deal -w- the qual / non-qual issue early
> * make sure you're okay to pool in acquisition
> * insist on shelf registration rights in acquisition
> * insist on hedge-ability in acquisition
> * don't borrow money to exercise options (so I hear...)
> * don't margin to pay taxes (if you can avoid it!)
> * if you self-hedge, BUY PUT LEAPS!

I'd put this at the very top.

> * listen to those smart IB private client guys
> * diversify early and broadly

Also:

  * brokers are inbeciles who will make things up
    rather than saying "I don't know" or "let me
    check"; choose your broker carefully and even
    then, don't trust them.
  * try to arrange an acquisition where PublicCo
    assumes the PrivateCo option plan,
    proportionately exchanging options-for-options;
    this avoids a forced-exercise before deal-close
  * transfer agents are staffed by people too inept
    to be brokers; never expect to get anything
    on time, made out to the right name, or sent
    to the right address

- Gordon



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