Episode
Understanding equity at tech companies, with Billy Gallagher of Prospect
- Published
- Nov 20, 2025
- Duration seconds
- 4783
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Summary
Why do billions of dollars of stock trade hands based on napkin math and vibes? Billy Gallagher, CEO of Prospect and former Rippling employee, joins Patrick McKenzie (patio11) to walk through the information asymmetry that costs less-sophisticated employees massive amounts of money. From understanding when to early exercise options to navigating 83B elections and tender offers, they discuss the critical decisions that have a shot clock ticking the day you sign your offer letter. – Full transcript available here: www.complexsystemspodcast.com/understanding-equity-at-tech-companies/ – Sponsor: Framer is a design and publishing platform that collapses the toolchain between wireframes and production-ready websites. Design, iterate, and publish in one workspace. Start free at framer.com/design with code COMPLEXSYSTEMS for a free month of Framer Pro. – Links: Prospect: www.joinprospect.com/ – Timestamps: (00:00) Intro (00:44) Billy's professional journey (01:07) Equity management challenges (02:29) The importance of equity compensation (04:53) Equity grant structures in startups (06:09) Understanding vesting terms (07:09) The value of equity over time (08:48) The myth of options as lottery tickets (11:23) Career tailwinds from startup experience (14:25) Breaking into the tech industry (15:16) The role of equity in compensation (17:49) Employee equity plans and dilution (19:59) Sponsor: Framer (21:06) Stock options vs. RSUs (21:55) The decision to exercise options (27:11) Tax implications of exercising options (33:03) The role of HR in equity management (36:14) Bootleg spreadsheets and vibes-based investing (38:09) Navigating tax complexities in different scenarios (41:31) The importance of extended exercise windows (44:18) Challenges with tax residency and remote work (49:43…