[jonathankoren]

It's the exercise and hold that gets you. If you do a same day sell, you have the money to cover the taxes immediately, since you sold. If you exercise and hold, you pay the money to exercise, and now owe taxes on the asset at fair market value of the assets when exercised, which you might not have because your bank account is actually decreasing. In the future, if the asset loses value, even if you sold all of it, you may still be left with a tax bill you can literally never repay.

[infinite8s]

Except you can't sell if the company is still private.

[jonathankoren]

That's not true. The market it very illiquid, but you can sell it. Sharespost is one place.