I guess being honest brings about too many opportunities for people who don’t understand the finances to make (or be perceived to make ) promises they can’t keep. So you might as well just get into a race to present the most ridiculous stuff possible.

Pref shares with a 1x preference are still worth like 10x common stock in early stage companies and it’s common for employed to get fucked by this.

Founders don’t get preferred shares (I think it’s really, really rare). There is founder pref stock, which is somewhat different. It’s common for founders to cash out some shares along the way, though.

You can use a collar for this at somewhat reasonable cost. Not sure how rolling that would compare to just using it to defer until you can cheaply sell and buy some fixed income ladder. Probably badly.

Also, there’s no capital gains to defer if you use a retirement account, which will be a better place for fixed income anyway.

I think this policy has been crafted in a lab to have both very few financial losers and yet make literally everyone mad.

The above means it can be an irrational bet to take the startup equity if the price you pay in opportunity cost is high relative to your bank. This problem gets worse the longer you stay after that first vesting, but is mitigated by the extrinsic option value of your options (which goes away when you leave and exercise)

They may not purchase on exactly the vesting date but they certainly do offset the issued shares with buybacks. I think they can choose to reduce those buybacks without as much rigamarole as they'd need to issue new shares for funding, so they can effectively used that as a "back door" way to raise money. I think it might juice their P&L a little too, but I doubt that's why they do it.

It's just leverage and it depends on the returns you're getting on the loan. Renting is also a kind of leverage though so if you own a home outright it might make sense to lever up. If you want that kind of leverage while still having the position in the house then an I/O loan is probably the easiest way to do it.

In particular the interest rate options in foxed mortgages are pretty expensive and it only hedges the cost of a particular house not housing in general.

Housing cost is correlated with local incomes so in some ways it's doubling down. In particular recessions are deflationary in the immediate aftermath.

Capitalists don't need worker demand to support their own consumption; spending out of profits directly supports profits overall.

It would be something of a consumption race to the bottom, however. They wouldn't be any better off vs if we supported adequate demand for everyone, but they might control a bigger slice of the (much) smaller pie.

The less complex sections were mostly on-par with other us cities.