IPO coming up, but no equity. Any reason to stick around?
November 6, 2022 4:40 PM Subscribe
I work for a private company that will probably IPO some time in the next 1-2 years. I'm middle management and have no equity (no chance of getting any, either). My boss says the IPO will be a big opportunity for promotion for me. Is there any truth to this?
Our team is going through undesirable changes that are seriously making me think about finding a new job. But my manager keeps telling me that this IPO will be huge boon for me (despite having no equity) because most of senior leadership will leave with their fat payouts, and I'll have a chance at being aggressively promoted and being given some kind of retention incentive. The way I see it, I also have equal chance of being let go when that time comes, and there's no way to know if anything positive would come of it for me. Am I being too pessimistic? The most likely scenario I see is my job would remain unchanged and it would be business as usual, except I'd be annoyed by seeing everyone around me get a huge chunk of change and resign.
Our team is going through undesirable changes that are seriously making me think about finding a new job. But my manager keeps telling me that this IPO will be huge boon for me (despite having no equity) because most of senior leadership will leave with their fat payouts, and I'll have a chance at being aggressively promoted and being given some kind of retention incentive. The way I see it, I also have equal chance of being let go when that time comes, and there's no way to know if anything positive would come of it for me. Am I being too pessimistic? The most likely scenario I see is my job would remain unchanged and it would be business as usual, except I'd be annoyed by seeing everyone around me get a huge chunk of change and resign.
Don't let yourself be guilted into staying. You can see the writing on the wall, and this just seems kind of manipulative. Your manager doesn't have your interests at heart, it's in their interest to see you stay on and continue to work for them.
posted by Alensin at 4:57 PM on November 6, 2022 [18 favorites]
posted by Alensin at 4:57 PM on November 6, 2022 [18 favorites]
The way I see it, I also have equal chance of being let go when that time comes, and there's no way to know if anything positive would come of it for me.
You are 100% right. Actually your scenario is likelier.
posted by kapers at 4:59 PM on November 6, 2022 [10 favorites]
You are 100% right. Actually your scenario is likelier.
posted by kapers at 4:59 PM on November 6, 2022 [10 favorites]
My boss says the IPO will be a big opportunity for promotion for me. Is there any truth to this?Maybe, but who knows? IPOs generally happen for growing companies. But this sounds like a pretty bad-faith argument on your manager's part. Does your manager stand to benefit from the IPO? Do they have any equity? My guess is that they're just stringing you along.
If I were in your situation (middle management, pre-IPO but no equity, and most importantly not enjoying my job) I would leave. If I had substantial vested equity and I didn't think they would pull any shenanigans with the IPO, then I would probably tough it out until the details of the IPO were more clear. In this situation, I'd be interviewing right now; the economic climate is about to get a fair bit worse and I'd prefer to not have to be stuck in a bad situation.
posted by kdar at 5:03 PM on November 6, 2022 [5 favorites]
Yeah if you don’t already have options it’s time to bail.
posted by tilde at 5:08 PM on November 6, 2022 [6 favorites]
posted by tilde at 5:08 PM on November 6, 2022 [6 favorites]
Nah, you're being fed a line. Even if your manager believes it, which they might.
In terms of career opportunities, it's true that it's much better to be in a a company that's growing, and I think people underrate how important that is (preferring to think they've done well because of their own merit.) But an IPO doesn't trigger a growth spurt*. The company is either growing anyway or not.
And an IPO doesn't trigger a mass exodus of management either. Most won't get "f--k you money," and those that do may be happy to stay anyway. And of those who leave, there's no reason to assume the company will promote internally.
Finally, IPO predictions are at the whims of lots of factors. The uncertainty on "a year or two" is considerable--at most it just means "more than a year away." The market might not be performing well, or major investors may decide portfolio balance means they *don't* want more liquid cash in 2024 after all, or any of a hundred other factors.
I say this as someone who has had good luck as a startup employee, albeit post-IPO. It works out sometimes, but you should be seeing other, more direct signals that things are going well for both you individually and the company.
* This may seem to require some explanation, given that the company will get a bunch of money from the market via IPO. But with modern finance, companies that haven't expanded yet but need cash are generally able to get it in terms of loans and other types of financing. Unless they can't convince anyone they have value . . . in which case the IPO will end up not happening anyway.
posted by mark k at 5:10 PM on November 6, 2022 [3 favorites]
In terms of career opportunities, it's true that it's much better to be in a a company that's growing, and I think people underrate how important that is (preferring to think they've done well because of their own merit.) But an IPO doesn't trigger a growth spurt*. The company is either growing anyway or not.
And an IPO doesn't trigger a mass exodus of management either. Most won't get "f--k you money," and those that do may be happy to stay anyway. And of those who leave, there's no reason to assume the company will promote internally.
Finally, IPO predictions are at the whims of lots of factors. The uncertainty on "a year or two" is considerable--at most it just means "more than a year away." The market might not be performing well, or major investors may decide portfolio balance means they *don't* want more liquid cash in 2024 after all, or any of a hundred other factors.
I say this as someone who has had good luck as a startup employee, albeit post-IPO. It works out sometimes, but you should be seeing other, more direct signals that things are going well for both you individually and the company.
* This may seem to require some explanation, given that the company will get a bunch of money from the market via IPO. But with modern finance, companies that haven't expanded yet but need cash are generally able to get it in terms of loans and other types of financing. Unless they can't convince anyone they have value . . . in which case the IPO will end up not happening anyway.
posted by mark k at 5:10 PM on November 6, 2022 [3 favorites]
I'll have a chance at being aggressively promoted and being given some kind of retention incentive.
Or you could start looking for a new position and take the one that gives you an actual promotion and raise right now. If you're good enough in your current job that your management is saying whatever they can say to keep you, you absolutely have options elsewhere. Don't undervalue yourself.
posted by mochapickle at 5:25 PM on November 6, 2022 [10 favorites]
Or you could start looking for a new position and take the one that gives you an actual promotion and raise right now. If you're good enough in your current job that your management is saying whatever they can say to keep you, you absolutely have options elsewhere. Don't undervalue yourself.
posted by mochapickle at 5:25 PM on November 6, 2022 [10 favorites]
Yeah, they'll say that.
Intangible rewards are good and social, like your reputation as a worker, the reliability of your labor and product, your education and experience, your name in the field. But tangible rewards are not real if you're not getting them. Your wage is just your real current wage. Being told that you'll be paid more in the future is only as real as it arrives. Has it arrived? Will it arrive? If you have to ask...
posted by panhopticon at 5:37 PM on November 6, 2022 [2 favorites]
Intangible rewards are good and social, like your reputation as a worker, the reliability of your labor and product, your education and experience, your name in the field. But tangible rewards are not real if you're not getting them. Your wage is just your real current wage. Being told that you'll be paid more in the future is only as real as it arrives. Has it arrived? Will it arrive? If you have to ask...
posted by panhopticon at 5:37 PM on November 6, 2022 [2 favorites]
If somebody above you in the company hierarchy wants you to stay because of some kind of eventual reward, they should put that reward in writing.
posted by amtho at 5:45 PM on November 6, 2022 [18 favorites]
posted by amtho at 5:45 PM on November 6, 2022 [18 favorites]
Given the market trends, IPO is looking less likely by the day too.
posted by flimflam at 6:06 PM on November 6, 2022 [7 favorites]
posted by flimflam at 6:06 PM on November 6, 2022 [7 favorites]
Sounds like the company is giving you approximately zero guarantees. At that rate, if you want to look around to jump ship I'd say no sensible reason not to.
posted by Goblin Barbarian at 6:14 PM on November 6, 2022
posted by Goblin Barbarian at 6:14 PM on November 6, 2022
I've been through company IPOs. My experience is that they tend to be extremely messy and stressful, especially for management. The reason I stuck it out through them was that I had equity that I wanted to see actually become valuable. I can't imagine volunteering to go through it without equity, at least if I had other viable options.
posted by primethyme at 6:15 PM on November 6, 2022 [3 favorites]
posted by primethyme at 6:15 PM on November 6, 2022 [3 favorites]
Best answer: I've been through an IPO and worked for a couple of companies soon after their IPOs.
First, things tend to be more stressful leading up to the IPO as there's a ton of pressure to make the numbers look good. Sometimes companies will lay off a good chunk of the workforce to become more profitable (or less unprofitable).
Once the IPO happens, the pressure continues each quarter to keep the numbers looking good.
In the US at least, it's common for all employees to have a 6 month lockup which prevents anyone from selling shares, so even the people with fuck-you-money won't bail for at least this long (there are ways around this if you're high enough up in the chain). In any case, anyone getting stock incentives probably have them structured by the company to encourage folks to stay (i.e. you get X shares each year). So in practice most people stay if things are going well. And even if they didn't have the golden handcuffs, many stocks list for below the IPO price for a while (maybe forever).
Even when the stock market is doing well, the IPO is a very iffy thing up until the moment it actually happens. All kinds of things go wrong.
So in short, I wouldn't stay based on some hazy notion that there might be an IPO in a year or two, even if you had equity in the company. It's all theoretical until it actually happens.
If it were in your position and I wasn't happy with the job, I would absolutely look for another job and expect equity to be part of the compensation package (if the company is private the value of any shares should be considered to be monopoly money for now, i.e. make sure you get paid a good salary since the stock will probably never be worth anything, but also negotiate to get as many as you reasonably can because they might turn out to be significant someday).
Best of luck!
posted by DrumsIntheDeep at 10:08 PM on November 6, 2022 [5 favorites]
First, things tend to be more stressful leading up to the IPO as there's a ton of pressure to make the numbers look good. Sometimes companies will lay off a good chunk of the workforce to become more profitable (or less unprofitable).
Once the IPO happens, the pressure continues each quarter to keep the numbers looking good.
In the US at least, it's common for all employees to have a 6 month lockup which prevents anyone from selling shares, so even the people with fuck-you-money won't bail for at least this long (there are ways around this if you're high enough up in the chain). In any case, anyone getting stock incentives probably have them structured by the company to encourage folks to stay (i.e. you get X shares each year). So in practice most people stay if things are going well. And even if they didn't have the golden handcuffs, many stocks list for below the IPO price for a while (maybe forever).
Even when the stock market is doing well, the IPO is a very iffy thing up until the moment it actually happens. All kinds of things go wrong.
So in short, I wouldn't stay based on some hazy notion that there might be an IPO in a year or two, even if you had equity in the company. It's all theoretical until it actually happens.
If it were in your position and I wasn't happy with the job, I would absolutely look for another job and expect equity to be part of the compensation package (if the company is private the value of any shares should be considered to be monopoly money for now, i.e. make sure you get paid a good salary since the stock will probably never be worth anything, but also negotiate to get as many as you reasonably can because they might turn out to be significant someday).
Best of luck!
posted by DrumsIntheDeep at 10:08 PM on November 6, 2022 [5 favorites]
If you don't have equity, they don't value you-- don't feel bad about looking for a better job.
Your boss's idea sounds barmy to me: if the execs all quit, then they don't think the company is going anywhere post-IPO. But it's probably just a line to keep you there without any real incentive.
posted by zompist at 2:31 AM on November 7, 2022 [1 favorite]
Your boss's idea sounds barmy to me: if the execs all quit, then they don't think the company is going anywhere post-IPO. But it's probably just a line to keep you there without any real incentive.
posted by zompist at 2:31 AM on November 7, 2022 [1 favorite]
Agree with the folks here, but more simply: if the reason to stay is to get X and Y in a couple years, why not look around and see if you can get X and Y now instead?
posted by Lady Li at 8:57 AM on November 7, 2022 [2 favorites]
posted by Lady Li at 8:57 AM on November 7, 2022 [2 favorites]
Honestly, even if you did have equity, an IPO is enough of a crapshoot that it's not worth sticking around for.
posted by Ragged Richard at 11:44 AM on November 7, 2022
posted by Ragged Richard at 11:44 AM on November 7, 2022
This thread is closed to new comments.
posted by Geckwoistmeinauto at 4:48 PM on November 6, 2022 [13 favorites]