In general, it's referring to the fact that you should be very careful with what you write down.
For example, if you send an email to a potential employee that the 10,000 shares you are offering them are worth $10,000, you've effectively valued your stock at $1/share. Now if you try to go and give options at $0.02/share and claim that is "fair market value", if the IRS ever saw the original email you would be in a bad situation.
Re. the grammar, happy to fix it up as necessary, it was done in a very conversational style as I didn't think it would be this popular, and likely has ways that it can be improved for clarity. Let me know what/where can be improved and I'll fix it up
Comments
In general, it's referring to the fact that you should be very careful with what you write down.
For example, if you send an email to a potential employee that the 10,000 shares you are offering them are worth $10,000, you've effectively valued your stock at $1/share. Now if you try to go and give options at $0.02/share and claim that is "fair market value", if the IRS ever saw the original email you would be in a bad situation.
Re. the grammar, happy to fix it up as necessary, it was done in a very conversational style as I didn't think it would be this popular, and likely has ways that it can be improved for clarity. Let me know what/where can be improved and I'll fix it up