Is it possible to execute options but then sell the shares to employees?

Question

More specifically, is it possible to leave a startup, buy the equity available to me through my vested stock options and then sell part of it back to current employees of the same startup?I don't see a reason why not, but maybe I'm missing something. At the end of the day, once you trigger the stock options, you receive a physical stock certificate that you should be able to do as you please with...

troydavis · Accepted Answer

(This is not legal advice. Consult a securities attorney.)
> you receive a physical stock certificate that you should be able to do as you please with...
No. The shares you’ll receive after exercising almost always have transfer restrictions. To sell or otherwise transfer them, you’ll almost always need the company’s permission.
Some companies are okay with it, others aren’t, others decide on a case-by-case basis or have specific requirements (like not increasing the size of the cap table). Read the options agreement and then ask the company, all before exercising (and potentially incurring a taxable gain). If possible, do all of this well before leaving.
(What you’re describing is closer to publicly-traded securities, which you mostly can “do as you please with” in terms of dispensation.)

codingdave · Answer

There isn't a universal answer to this - every company will be set up differently. Ask whomever runs the stock plan at your company. Not only do they have the knowledge to give you answers, they probably also know which internal folk might want to buy, if it is allowed.