1) "Don’t forget though, you’ll have to pay taxes, because the value of your shares is likely greater than the price you paid to buy them."
This is not true if, like most stock options, yours are ISOs and you don't hit AMT.
2) "I didn’t have enough money"
There are now places that'll loan you money secured against the value of the shares themselves. If the alternative is not exercising the shares at all, this is a pure win (these services eat into your profits, but some is better than 0)
3) "I didn’t have enough time"
It's increasingly common for startups to have much more generous time spans for exercise. The 90 day window is required by law for ISOs, but many companies now autoconvert at the 90 day mark to NQSOs with much longer time spans, up to 10 years in some cases (Stripe, Pinterest, and Flexport are examples). This is something you should ask about before joining a company.
4) "I didn’t think the company would survive"/"I have a low risk tolerance"
These are the only ones that really matter. Like any investment, you gotta weigh the ROI and risk against your preferences.
> This is not true if, like most stock options, yours are ISOs and you don't hit AMT.
I think for most folks in tech not hitting AMT with any reasonably sized option grant worth buying will be extremely rare:
1. Options vest, usually over a 4 year span, so if one, two, three years go by at your startup and there isn't a large difference between your strike price and the current valuation, well then that's a huge signal you don't want to buy in any case.
2. Given your average software developer salary and average range of options, it takes very little to actually hit AMT.
1) "Don’t forget though, you’ll have to pay taxes, because the value of your shares is likely greater than the price you paid to buy them."
This is not true if, like most stock options, yours are ISOs and you don't hit AMT.
2) "I didn’t have enough money"
There are now places that'll loan you money secured against the value of the shares themselves. If the alternative is not exercising the shares at all, this is a pure win (these services eat into your profits, but some is better than 0)
3) "I didn’t have enough time"
It's increasingly common for startups to have much more generous time spans for exercise. The 90 day window is required by law for ISOs, but many companies now autoconvert at the 90 day mark to NQSOs with much longer time spans, up to 10 years in some cases (Stripe, Pinterest, and Flexport are examples). This is something you should ask about before joining a company.
4) "I didn’t think the company would survive"/"I have a low risk tolerance"
These are the only ones that really matter. Like any investment, you gotta weigh the ROI and risk against your preferences.