Summer Interns Weigh Options - I
Summer Interns Weigh Options - II

Summer Interns Weigh Options - I

That's what happened to a few MIT students, whose short-term gigs at start-up Akamai Technologies reportedly turned them into stock market millionaires.

The company, started by MIT computer scientists, hired a bunch of students to help develop applications for routing traffic over data networks. In return, students got both wages and some stock options.
Akamai options became enormously valuable this fall, when the company took itself public in one of the most spectacular stock market debuts of the year, soaring in the following weeks to a valuation of close to US$20 billion.
As for those who didn't work at Akamai, it may have inspired them to secure a little stock option action of their own.

"Students realize that there's a risk in getting involved with a start-up, and while they can't afford to pay you a regular salary, the options are considered to be a replacement," said Craig Thompson, a student at MIT's Sloan School of Management, who said he's taking stock options into account as he searches for a summer job.

Rachel Sunden, a student at University of Southern California's Marshall School of Business, says she could have gotten about a third more in salary had she accepted a job last summer with accounting firm Ernst & Young. Instead, she took a lower-paying job with stock options at Web start-up PrintNation.com, an e-commerce site for the commercial printing industry.
Sunden, who continues to work for PrintNation while finishing her MBA, said the options were an incentive, but not something she ever counted on.

"When I started, there were the two founders, a marketing person, the webmaster and Happi the dog. That is it. I had no idea if the vision of the site would become a reality," she said. "When I accepted the internship I did so for the experience and not for the potential payoff."
Still, if the company -- which now employs about 60 people -- ever does go public, Sunden estimates her summer stock options could be worth between $20,000 and $30,000 -- a nice payout for a summer job.

Although there's no standard for measuring the value of summer options, hardly any students expect an Akamai-like payout.
So how much equity should a short-termer expect?

Probably not a lot, said Travis Bowie, co-founder of the student portal site college411, who gave stock options to five Stanford undergrads working at his start-up company.

Firms that fund start-ups tend to frown on the practice of giving large options grants to short-termers, Bowie said. In most cases, companies offer somewhere in the range of a couple of hundred to a thousand options -- enough to motivate interns but nothing that will make them rich.
Bowie didn't say how many options student workers at his company get, but said it's "relatively small compared to what other employees are getting."

Silicon Valley companies, which have traditionally offered options to full-time employees, are seen as leading the way in extending stock offers to student workers. But it's certainly not an exclusively Northern California phenomenon.
This year's job seekers are a sharp contrast to students looking for internships just two or three years ago, who never really expected to get stock options for summer posts, said Steve Lubrano, head of career services for Dartmouth's Tuck School of Business Administration.

And even though such grants are getting increasingly common, there are still few stories of them actually paying off.
"What you see is a lot of students who have options in companies that haven't reached the public market yet," said Bowie, 23, who graduated from Stanford this year and saw a lot of his classmates get equity in so-called pre-IPO companies.

But students say they're willing to wait. And while a chance to cash in would be nice, it's not their main motivation for taking a Net job.
"I valued the experience, and the options were a nice sweetener," said Vladimin Kuznetsov, a student at Wharton School of Business, who took a summer job at Allegis, a business-to-business e-commerce company.
"I didn't ask for options, but I was offered them, and I thought it was nice," he said.

Source: by Joanna Glasner, Dec. 25, 1999, The Wired