Tech Employees Are Being Robbed Of Billions | Ep. 417 with Oren Barzilai CEO & Founder of Equitybee

Daniel and Oren Barzilai, Co-founder and CEO of Equitybee, dive into a problem hiding inside the startup economy: employees can spend years helping build valuable companies, receive stock options as part of their compensation, and still walk away with nothing because they cannot afford to exercise those options. Oren explains how his experience building Tapingo and watching employees miss out after its acquisition by Grubhub planted the seed for Equitybee. The conversation covers how startup equity actually works, why companies staying private longer has made the problem worse, how employees should evaluate equity offers, and why private market access may be creating an entirely new class of wealth.

Key Discussion Points

Oren explains that the true amount of startup employee equity going unexercised is difficult to measure, but estimates can range from tens of billions to potentially much more each year.

He argues that being a founder is not necessarily the highest-probability path to getting rich and that joining the right startup at the right time can create a life-changing financial outcome.

Oren shares that he was getting paid to code at thirteen during the dot-com era and remembers the fulfillment of creating something that other people actually used and valued.

He explains how the acquisition of Tapingo by Grubhub exposed the painful equity problem firsthand: former employees who should have received hundreds of thousands of dollars had lost their options because they could not afford to exercise them.

Oren shares how the original idea for Equitybee sat in his notes for years until he met an employee who needed roughly $200,000 to exercise stock options before leaving a company.

After helping that employee connect with investors, referrals quickly followed, proving there was a much larger need for a platform connecting employees with exercise funding.

Oren explains why the problem has become more severe as startups stay private for longer, creating more value before an IPO while employees change jobs more frequently.

He breaks down the first things every startup employee should understand: stock options are not shares, the strike price matters, taxes matter, and employees may need to exercise before a liquidity event to preserve their equity.

Oren shares the story of a Wiz employee who needed around $170,000 to exercise options. Equitybee helped provide the funding, and after Wiz's acquisition the employee reportedly netted approximately $5.2 million after investors were repaid.

He also tells the story of an immigrant developer who had no spare capital, received funding to exercise his options, later netted over $3 million, and used part of the money to start a nonprofit providing dental care to children in India.

Takeaways

Startup employees should evaluate equity offers with the same seriousness they use to compare salaries, benefits, and job titles.

Stock options are only a right to buy shares; if employees cannot afford the exercise price and associated taxes, they can lose the value entirely.

Companies staying private longer has created enormous wealth on paper, but employees need infrastructure and education to convert that paper value into actual ownership.

The most attractive private market investments may not always be the companies everyone is already talking about, because popular names can become expensive before investors gain access.

Life-changing wealth does not always lead people to stop working. Oren believes builders often return to entrepreneurship, investing, advising, and mission-driven work because their motivation goes beyond money.

Closing Thoughts

Oren Barzilai’s story reveals a part of startup compensation that many employees do not understand until it is too late. Equity is often sold as the promise of participating in a company’s success, but without the capital, education, and infrastructure to exercise stock options, that promise can disappear. This episode is a reminder that the people helping build tomorrow’s billion-dollar companies need to understand exactly what they own—and what they must do to keep it.

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