Tech Stock Options Not Dead
Om expresses an opinion that we had previously written on – that it makes a lot more sense to work for a company like Google than it does to work for a start-up, as nobody is buying into stock options as having any value.
VC Tom Perkins, however, expressed faith that the tech community will figure out a way to make stock options work despite regulations that force the expensing of stock options. He puts his full faith in clever accountants – ‘We have to find some way around this. There probably is a way…I suspect something will come up.’
This is yet another reason why the UK is an exciting place to make early stage investments: the EMI scheme (Enterprise Management Incentive scheme).
Not only are stock options alive and well, any capital gains for entrepreneurs are only taxed at 10%. The main restriction to qualify is that employees/founders must hold less than 30% of the business to qualify for the scheme.
There is also an EIS scheme which gives angel investors a 20% tax rebate on any funds invested (up to £200,000).