I agree with the gist of the post, but there are some ways in which you can tip the scales in your favor:
- Get an offer where you get your options up front and the company reserves the right to repurchase them.
- Exercise your options immediately and file an 83b election. There will be no difference between fair market value and strike price, so your exercise-time tax liability should be zero. Obviously, this is easier if #options*strike_price is low.
- Look for a low strike price. If the seed round was convertible debt, the strike price may still be low.
- If you're trying to "go big or go home", look for a big gap between strike price and the price of preferred shares in the most recent round.
- Work at a company that is a qualified small business at the time you (fully, see above) exercise your initial grant, and hold your stock for five years. This can make any capital gains almost entirely tax free (see e.g. http://www.morganlewis.com/pubs/Tax_LF_CongressExtendsSmallB...)
I am _not_ a tax/finance professional, so remember to take these with a grain of salt!
- Get an offer where you get your options up front and the company reserves the right to repurchase them.
- Exercise your options immediately and file an 83b election. There will be no difference between fair market value and strike price, so your exercise-time tax liability should be zero. Obviously, this is easier if #options*strike_price is low.
- Look for a low strike price. If the seed round was convertible debt, the strike price may still be low.
- If you're trying to "go big or go home", look for a big gap between strike price and the price of preferred shares in the most recent round.
- Work at a company that is a qualified small business at the time you (fully, see above) exercise your initial grant, and hold your stock for five years. This can make any capital gains almost entirely tax free (see e.g. http://www.morganlewis.com/pubs/Tax_LF_CongressExtendsSmallB...)
I am _not_ a tax/finance professional, so remember to take these with a grain of salt!