Gilt Groupe Is A Cautionary Tale For Startup Employees Banking On Stock Options
A $250 million acquisition probably sounds like a lot to many employees of privately held companies. But for startups backed by big venture capitalist money, even a deal that big can be a financial bloodbath for employees. Case in point: Re/code spoke to a half dozen former employees of flash sale site Gilt Groupe in the two weeks since its $250 million acquisition by Hudson’s Bay Company was announced. And at least three of them lost more than $10,000 as a result of the deal. The outcome is a stark reminder that buying shares in a startup you work for is often a riskier financial bet than it may seem, even at a company as hot as Gilt once was. The story of Gilt, which was once valued by investors at more than $1 billion, also serves as a cautionary tale for the 100-plus startups with valuations of $1 billion or more today: That number on paper can vanish in, essentially, a flash. Read more at Re/code.
