[btilly]

And I HIGHLY recommend you don't purchase any of the vested shares until the company is public, and only then when you intend to exercise them immediately (which is generally a cashless transaction).

Usually true, but not always. There are situations in which purchasing shares over several years prior to a pricing event can avoid AMT screwing you. It is rare, but it happened to me once. It happens when the details of the pricing event count as income under AMT, but not under ordinary tax rules. If you have large deductions under ordinary tax rules (the most common is the federal deduction for taxes paid to the state), then AMT can hit you.

If you think this might happen to you, discuss with a competent accountant. The rules are complex, I don't know them, and all I can usefully tell you is that it is possible, it is rare, and I very nearly was in a case where it would have happened. (I was careful to purchase options early so that eBay's purchase of Rent.com with stock would not trigger AMT consequences. Then the deal was changed to cash and it didn't matter.)