Exercising the options makes it harder for him to get screwed later on. Also it can put you in a better position later on when you sell because you pay capital gains tax on the appreciation of the stock rather than ordinary income tax on the options.
This works because stock is considered an investment where as options are not considered investments (according to the tax code) and by holding the stock for more than a year it's considered "long term" and thus it gets classified as capital gains.
Ultimately I think it's a very smart thing to do especially if the company says that the stock is valued at $0.0001/share meaning that he can exercise 1000 shares per $1. The only time there's ever a downside to exercising early is if your strike price is substantially above $0/share meaning that it might cost a sizable sum. If it's free -- or nearly free -- to exercise, there's really no reason not to.
Unless of course you end up in a situation like this person has.
This works because stock is considered an investment where as options are not considered investments (according to the tax code) and by holding the stock for more than a year it's considered "long term" and thus it gets classified as capital gains.
Ultimately I think it's a very smart thing to do especially if the company says that the stock is valued at $0.0001/share meaning that he can exercise 1000 shares per $1. The only time there's ever a downside to exercising early is if your strike price is substantially above $0/share meaning that it might cost a sizable sum. If it's free -- or nearly free -- to exercise, there's really no reason not to.
Unless of course you end up in a situation like this person has.