I really like the notion of helping employees exercise their options too with cash compensation and it's something we're looking into too at Pachyderm as we just started hiring.
What's the legal structure of that cash repayment? Is it a bonus or can the company just pay the exercise price themselves and that's that?
Post-A round makes it much harder.
You have employees who own shares but need a nontrivial amount of cash to cover taxes. You have investors who may be interested in acquiring more shares (or the company may want to buy them itself). You have a notion of a current valuation of the shares. Broker a sale at a price that's beneficial to both parties.
What is the company's incentive to block such a transaction?
I'd love to see this become standard.
The 10 year exercise window likely makes this unnecessary, but if not he says they will arrange for some form of liquidity.
If there's a good path to the employee owning their shares (or some fraction thereof) outright, that is more desirable in some ways than an outstanding option agreement with a ticking clock.