Sunday, April 20, 2014

Tax treatment of early-employee options

There is a great post from Sam Altman on Employee Equity.  I think it reflects many things that I've agreed with for quite some time.  The paragraph that I think is particularly salient is as follows:

With regard to tax treatment of options:

I think there are a lot of ways to fix this.  The easiest would be if the IRS would agree to not tax illiquid private stock until it gets sold, and then tax the gain from the basis as long-term capital gains and the original value as ordinary income.

Another might be to create a new class of employee stock.  Today, in an early-stage company, common shares are usually worth much less than preferred shares.  It might be possible to create a class of shares with less rights than common and thus worth even less.  The idea would be to convert these shares into common on an acquisition or IPO, but before that, they would be non-transferable and have no value.  If it were possible to create a class of stock that the IRS agreed had next to zero value, it might be possible to grant employees this sort of stock, have them owe a tiny bit of tax on it now, and then have normal long-term capital gains treatment years later when the startup goes public.

What about it IRS?  I think that it is high-time to fix the tax treatment for early employees of companies.  Right now, there is a huge divide between those employees wealthy enough to hang on to their options, and those that cannot.  This needs to be changed.

Tuesday, May 28, 2013

Green Power Report

I was interviewed recently on AM 590's Green Power Report and it was a pretty good show. Check out their back catalog of previous interviews; they have some good names on them. At any rate, the audio is attached. I speak about ocean power, California's energy policies, and Energy Cache.


Tuesday, May 14, 2013

Solve for X Talk

The conference was pretty interesting. Here's a link to the talk.

Saturday, May 11, 2013

Solve for X in Washington DC

I've been invited by Google and USAID to speak at the Global Diaspora Forum in Washington next week. If you are going and would like to check it out, I'll see you there!

Monday, February 04, 2013

Aaron Fyke MIT talk part of Google X - Solve For X Series

I am privileged to be in some pretty impressive company.  My recent talk at MIT was picked up by Google and is hosted as part of their "Solve for X" series of moonshot thinkers.  Link is below.

Thursday, January 31, 2013

Immigration Reform - "Back of the Line"

Obama said something interesting with his speech about comprehensive immigration reform the other day.  He said that illegal immigrants would need to go to the "back of the line".

For unskilled immigrants, there typically *IS* no line.  There is basically no way to legally come to the US, unless they are family members of existing US citizens. See the chart below.

So, I wonder what he was talking about?  I think immigration reform is a necessary step, but I'm really interested in how this is actually going to be implemented.

Tuesday, January 22, 2013

Politics and Entrepreneurship

"Obamacare" has been cast as a left vs right issue.  Democrats are in favor of it.  Republicans hate it.  However, the reason for this is that it is framed as a "lazy do nothing people being given healthcare paid for by good, hard-working citizens who already have healthcare".  This is silly, yes.  However, as far as entrepreneurship goes, there should be far more right-wing support for Obamacare than there is.

Why is this?  Because, here in the US, healthcare and employment are very tightly linked.  This is fine for those with a job.  However, it is not so fine if you want to quit your job and start a company.  I thought Obama's remarks yesterday summarized it perfectly:

    "They do not make us a nation of takers; they free us to take the risks that make this country great."

Government programs which allow people to walk away from their job and start something new are critical for new company development.  Entrepreneurship and free enterprise should be cornerstones of the Republican platform, and they should favor any policy which promotes new company development. It seems that this point is being lost in the noise.