Personally would avoid working at any startup that is in the awkward middle stage and would require you to shell out six figures just to exercise some questionable options especially now. Either join a very small company in the early stages where the valuation is still low or join a late stage or public company where you vest RSUs and don’t have to deal with options at all.
This is what Bolt was trying to solve. They did it the wrong way and hurt a lot of people, but they were trying to give people the opportunity to exercise early.
The correct answer is a 10-year extended window. It's not perfect, and there are downsides. But it's (currently) the fairest way to issue stock options to employees. By the time it comes time to exercise, the employee will be significantly de-risked because they'll know how the company is doing.
Also, $10k is a lot of money. Even if you have it in savings (and I'd agree a lot of tech people technically do), it's a huge gamble on an unknown startup. You're already gambling your time; now you're supposed to also gamble your money?
these types of work environments self select for people who are comfortable taking on risk. no one is forcing you or anyone else to join.
Sure people can not work at companies that don't provide 10 year exercise options. Its not like they are slaves.
But that doesn't mean there aren't better ways of structuring options and it is bad to point this out.
I make a a great wage and have savings in the bank. However I have a 6 month old baby at home and a wife who is taking time off from her career to look after our baby. I also left a job I was at for almost 5 years and exercised my options on the way out. This cost me almost $30k in cash. At my new job early exercising would cost me nearly $40k. Spending $40k to early exercise this startup's equity grant feels like it might be a little irresponsible. It wouldn't surprise me at all if other people didn't have that much lying around.
I don’t doubt that many people have the same thought process, but if I decline to early exercise from a company that offers that option the alternative is a massive tax bill down the road that I didn’t need to pay if the company does remotely well.
I'll vest my options here without exercising and if they turn into something one day that'll be nice. In the meantime I'll collect the nice salary I negotiated for myself and grow my career the way I wanted.
Edit:
A little clarification about my last role. I took that job because they were using tech I wanted to learn and they had a team I wanted to work with. They also offered me salary that was a healthy bump from where I was at at the time. I didn't early exercise those options back then because I didn't know enough about the company to justify plunking down the cash. After being there nearly 5 years I believe in the company a lot and see the exercise as a smart investment. I don't have that clarity yet for my current role and so it just doesn't make sense to me to early exercise.
How would that work? Very few people stay in a tech job for 10 years. I stayed in a software job for 9 years, until I was laid off, and that's extremely unusual.
Here's more: https://zachholman.com/posts/fuck-your-90-day-exercise-windo...
i feel like people who are acting like early exercise is money down a black hole aren’t aware that if the company is going nowhere you will probably know that long before 4 years, in which case if you leave you get a refund for unvested options. and even if you’ve vested shares you’re unsure about in many cases the company will offer to buyback shares.
worst case it’s a write off against capital gains.