Ask HN: Early exercising of startup options, convenient or not?
A bit less than 2 years ago I joined a software startup in SV as one of the very first employees, right after their seed round. At that time, I got ISOs for ~2% of the equity pool. This amounts to about 100000 options with an exercise price of 0.20$. The seed round was 1M with a post-money valuation of 5M. The vesting schedule was the typical 4 years with 25% cliff the first year and monthly thereafter.
A few weeks ago, the company raised a series A, getting 5M from investors with a post-money valuation of about 20M.
I haven't looked at the official 409A, hopefully the numbers above should be enough.
Now, I'm very unsure whether I should go down the road of early exercising options (and pay early taxes), or if at this stage I can keep doing what I did so far (which is nothing). My goals are:
1) Minimize the taxes I'll have to pay in case of a liquidity event (acquisition or IPO) 2) Minimize the money I'll lose (by paying early taxes) if the company dies before a liquidity event 3) Minimize the money I'll lose (by paying early taxes) if I'll be fired or decide to leave before a liquidity event of before my options fully vest
Thank you very much.