Four million employees quit their jobs in April, reports the Bureau of Labor Statistics. It's the highest employment exodus since the agency started collecting that information in 2000. The number of job postings hit a record high, leaving 695,000 more open jobs than unemployed workers.
In a recent LA Times article, Anthony Klotz, a professor of management at Texas A&M’s Mays Business School, writes, "After a year of unprecedented stress, workers are also burned out and reexamining how to live their lives. People have had epiphanies over the past year.” Klotz, who has researched the psychology of quitting for much of his career, adds, “We all want to pursue life, liberty, and happiness, and many of us have realized our job isn’t the best way to get there.”
Some of this may be attributed to burnout, post-COVID stress, and a work/life balance impacted by the necessity for nearly all activities to operate out of the home.
Due to this phenomenon, summer 2021 has been dubbed The Summer Of Quitting.
What's surprising is that a large number of those participating in this professional exodus are not, according to the data, immediately looking for their next job. Instead, they are taking a sabbatical.
Throughout a tumultuous 2020, the workforce was concerned about massive layoffs. This year, the narrative has shifted; longtime tech employees are departing. But in both cases, the steady monthly income from a startup job will be lacking. How are many of the employees quitting going to be able to afford their sabbatical?
Most employees look towards an IPO, SPAC, or M&A as an opportunity to make a lot of money off the company they helped build. But actually, companies gain the highest amount of value when they are still private. If a startup employee joined at the right time and got a nice options package, there is no need to wait for the IPO in order to exercise your options.
The average cost of exercising employee stock options is $140k. And there is no need to invest $140k out-of-pocket. Funding platforms like EquityBee will supply all the funding and assume all the risk. The way to sipping a pina colada on a beach somewhere can be closer than ever.
I believe that the most important decision an employee can make when leaving a high-growth company is whether to take part in the success of the company they helped build. Each startup employee got an additional “bank account” when they joined: the employee stock options “bank account”. When they leave, that bank account can either be exercised or within 90 days be returned to the startup pool and result in a big fat zero for the employee.
If a startup employee leaves their job for a much-needed sabbatical, they should be able to exercise their employee stock options. Upon a liquidity event, that imaginary bank account can convert into a sum of money that can be life-changing.
One of the options for startup employees leaving their jobs is exercising their stock options via funding platforms like EquityBee. Here’s how it works: employees (or ex-employees) are matched with accredited investors to fund their employee stock options; all of the risks is on the investors’ side and the employee doesn’t need to spend a dime. Once the company they leave experiences a liquidity event like an IPO or SPAC, they will receive their exercised options, a sum that might help make their sabbatical more comfortable--perhaps even permanent. The prospect of an endless summer is now that much more feasible.