At the beginning, a company is usually $100 or so in total, and the founders pony up $20 or so each to buy their shares. The company can buy back the portion of unvested stuff for the balance of the $20 until it vests.
83b election gets you out of tax hell, too.
Talk to your lawyer.
Edit: rdl , for the loan from the company to do the 83b election to be a considered a loan by the irs it must have almost full recourse. You will be liable for it and the creditors will ask for the loan amount in case of failure.
A loan which is somehow forgivable for the stock seems like it could solve this; if the stock is worthless, return it instead of the loan. (I thought you can do that? But I guess you can't?)
http://www.ecjlaw.com/22505/ecj-viewpoints/taxing-matters/ho...
"Here is how it works: The employer transfers the stock to the employees at no cost, and the employees make the Section 83(b) election to accelerate the taxable event to the date of transfer. That requires the employees to recognize ordinary income in an amount equal to the value of the stock and enables the employer to report an ordinary noncash deduction equal to the same amount.
The employer then finances the employees’ income-tax liability with a nonrecourse loan to the employees (at today’s low interest rates) secured by the restricted stock. Since this doesn’t involve the financing of the employees’ purchase price of the stock, the restricted stock grant would be considered a “transfer” of the stock, thus closing the compensation element of the transaction upon transfer because the Section 83(b) election is made. This avoids the tax uncertainty created by financing the actual stock acquisition with a nonrecourse loan and the requirement of a substantial cash down payment by the employees or, alternatively, a substantial portion of the acquisition note’s being recourse.
Although employees must still pay the ordinary income tax incurred on the date of grant, they have deferred the payment of the tax by means of the employer’s nonrecourse loan. The employer is permitted a noncash deduction in the same amount and at the same time, while the employees are required to include the compensation element of the restricted stock grant in income."