[inmygarage]

While convertible notes and SAFE documents have made seed stage financing much more streamlined and straightforward, employee equity is still a hot mess in terms of the legal, financial and tax difficulties that only present themselves after it's too late.

The biggest issue IMO are those scenarios when private, completely illiquid stock gets taxed as ordinary income. There should be a way to pay the tax with the same shares, though counting on the IRS becoming "flexible" is probably a longshot.

While I agree with the other points mentioned, that is one the largest and most painful when it presents itself. I do think there's also an opportunity for companies to be creative about exercising mechanics as well.