Yes.
But then you will never make any money off your equity that way.
Sure, if you stay for a year, you may vest into a bit of stock. And it might even seem like, if you quit after you hit your cliff, and do another start-up, you’re collecting more stock from more companies, and you might do better this way.
But that’s wrong:
- First, obviously if you leave before Year 1, you get no stock at all. Keep leaving and leaving and you may get nothing.
- More importantly, even if you leave at Day 366 (i.e., getting to your cliff), you won’t really get 25% of your stock. That’s because if you are good, as long as the company you are at is under a few hundred employees — you’ll get more options. Either you’ll get promoted and get more options (promotions are quick in a start-up if you are a rockstar), or you’ll get more options because in a start-up, you can easily be appreciated if you rock. So really if you leave after Year 1, you’re probably only getting 15% of your total expected options.
- If the basis/strike price is other than nominal, you have to pay to buy your stock. And it may be too expensive to buy all of it when you leave. This is a downside of the monster, high valuation rounds these days (combined with the relatively modest discounts for common stock to preferred since the mid’00s). In which case, you’ll end up with nothing. If you stay through a liquidity event, this issue goes away. More on this problem here.
- If you get RSUs instead of options, in some cases, you may get nothing when you leave anyway pre-liquidity event.
