Moxie Partners — March 2026
Should You Exercise
Your Stock Options?
98,000 ISOs at $1.85 strike • ~$170K over 3 years • 409A at $5.12
The Setup
Where Moxie Probably Lands
Bell curve centered around $300-400M, capped at $1B. Most outcomes between $200-600M.
~50% chance Moxie exits below $400M
~50% chance it exits $400M–$1B
Liq prefs eat value below ~$120-160M
The Cost
What Exercising Actually Costs
Not $170K. The real cost is the money at risk in bad outcomes, plus opportunity cost.
$5K
per month for ~34 months
$170K
total outlay (you can stop anytime)
~$8K
opportunity cost (vs HYSA/index)
IF MOXIE FAILS — YOUR ACTUAL EXPOSURE
Stop at 6 months
~$55K
Stop at 1 year
~$88K
Stop at 1.5 yrs (likely)
~$110K
Never stop
$170K
You'd see the company deteriorating and stop.
Why It Matters
At Acquisition, You Have No Choice
If Moxie is acquired for cash, all shares convert immediately. There's no "hold and wait for better tax treatment."
PRE-EXERCISED (LTCG)
- You already own shares
- Held >1 year = capital gains
- Tax rate: 25-29%
- At $500M exit: $1.35M net
NOT PRE-EXERCISED (CASHLESS)
- Exercise + sell same day at acquisition
- Entire gain = ordinary income
- Tax rate: 40-44%
- At $500M exit: $1.07M net
There is no clever tax move at acquisition. No installment sale, no deferral, no hold-and-wait. It's a forced taxable event. The only way to get LTCG is to already own the shares.
The Payoff
Tax Savings at Every Exit Level
Tax savings = gain × 15% rate differential. Mid-pref ($120M) assumed.
$0-100M
15%
$0
-$100K
$200M
15%
$49K
+$35K
$300M
20%
$142K
+$128K
$400M
25%
$197K
+$183K
$600M
15%
$308K
+$294K
$800M+
10%
$418K+
+$400K+
$300M+ exits produce $128-540K in tax savings.
Exercise cost: $170K
Opportunity cost: $8K
Breakeven exit: ~$200M
The Math
Expected Value: Your Probabilities
Weighted by your estimates, not equal weights.
$0 (fails)
5%
-$100K
-$5K
$50-150M
10%
-$100K
-$10K
$150-250M
15%
~$0
~$0
$250-400M
25%
+$155K
+$39K
$400-600M
25%
+$250K
+$63K
$600-800M
12%
+$365K
+$44K
$800M-1B
8%
+$470K
+$38K
TOTAL
100%
+$169K
Expected Value of Exercising
+$169K
using your probability estimates
Even with 50% chance of underperformance, the tax savings in good outcomes more than compensate.
EV stays positive if you assign >30% to exits above $300M.
The Risk
What If I'm Wrong?
The loss-aversion check: what does losing look like, and can you handle it?
Worst Case
-$100K
Company fails. You stop exercising at ~1.5 years.
Breakeven
$0
Sells for $150-250M. Tax savings are small.
Good
+$155K
Acquired $300-400M. Savings exceed costs.
Great
+$300K+
Acquired $500M+. Massive tax savings.
15%
Chance you lose ~$100K
(company fails)
15%
Chance of breakeven
(exits $150-250M)
70%
Chance you come out ahead
(exits $250M+)
The double-hit fear: "Moxie fails AND I lost $100K." That's the worst case — but it's 15% likely, and you'd stop early (~$55-110K, not $170K). In the other 85%, you either break even or save $100-500K in taxes.
Recommendation
Exercise As You Vest. Start Now.
Think of it as insurance:
$5K/month to protect against a 15% tax penalty on a $1-3M payout.
Cancel any month. When Moxie exits above $300M — which you think is more likely than not — the savings dwarf the cost.
For Rivka:
"We'd spend $5K a month — like insurance — to protect against $200-500K in extra taxes if Moxie sells well. If it fails, we lose about $100K because we'd stop early. We can quit any month."
Stop exercising if:
- → Revenue stalls below 50% YoY
- → Key leadership departures
- → Failed fundraise or down round
- → You need the cash
Next Steps
1. Find out total preferred raised
2. Talk to Rivka
3. Exercise vested backlog (~$42K)
4. Set up monthly auto-exercise
5. Find ISO-savvy CPA
6. Reassess quarterly
Expected Value
+$169K
with your probability distribution