Equity compensation//45s
RSUs look like money on paper. The exit plan is the hard part.
RSUs at a private company can be stuck at a valuation you can't cash out, sometimes for years. Why the question of how you'll eventually sell comes up sooner than people expect.
Transcript
If you are a tech founder, executive, or even an employee, you have this problem. This is called restricted stock units. Although they can be lucrative on paper, a lot of times they cause issues. They do not have liquidity. You get stuck to a valuation that is not justifiable, and you might never go public.
That is why it is important to understand what you have. Most RSUs are not created equal. Sometimes you work for a company for years and those RSUs are locked up until you even exit.
So the most important thing to understand about RSUs is the exit plan. It comes up the majority of the time before you even think about it, and you always have to have a strategy. The RSUs have value on paper, but there needs to be a strategy behind them for when they become liquid.
These are transcripts of short educational videos Malik published on his own social profiles, edited for readability and to remove phrasing that could read as a personal recommendation. They are general education and marketing, not tax, legal, or investment advice, and not a recommendation to buy, sell, exercise, donate, hedge, or hold any security or to use any account, plan, or strategy. Contribution limits, phase-outs, and tax treatment change and depend on your facts. Talk with your own tax, legal, and advisory professionals before acting.