Either your explanation is unclear, or you do not understand RSUs.
> RSUs [...] evaporate if you leave or are fired from the company. You can not purchase them like stock options.
RSUs do not evaporate. Vested RSUs are yours outright. You cannot purchase them because they are already "purchased".
> So you have to stick around until the company becomes public.
In both cases, the RSU or the stock underlying an option, it is equally worthless until there is a liquidity event.
> Oh they also expire in five years
Companies don't even offer RSUs until they are close to being public. Once you reach a certain threshold of stockholders, you have to report financials. Since this is typically undesirable for private companies, they don't want to jump the gun on issuing RSUs instead of options. If the 5 years does pass without IPO, companies re-issue new grants. (Please: name one company that has actually expired RSUs and what happened)
OTOH most stock option grants expire in 90 days upon termination. This is a real expiry, and actual money out of your pocket (and tax liability) to exercies them, and usually a difficult decision. There are some places doing 10-year expiry but those are still the exception.
> The odds of stock options working out is low, but for RSU's they are much, much lower.
It's the opposite. For a private company, RSUs are much much closer to money in the bank than are options.
That is not true. You keep whatever you vest (i.e. typically stay at a company at least 1 year). That is the same for stock options.
Typically companies that offer RSUs have achieved scale (your Ubers and Stripes of the world), so yes the upside is lower, but the "pros" are that it's more obvious to you what the value of the grants are and you don't have any cost to exercise them like with options. These companies know that because they are less liquid vs public cos that candidates are right to discount them, which is why they usually offer more than what you'd otherwise receive from a Google or FB.
> Nope, the "stock units" that you "vest" will expire after a few years.
When they vest, you either get (1) actual shares, (2) the cash equivalent (I think that option may only be available for publicly traded stock), or (3) at your option, retain the RSU for conversion at a later date.
Unconverted deferred vested RSUs might expire (and vested stock options definitely expire), but—unlike options—there’s almost never a reason not to convert an RSU (deferring for later conversion may make sense, but it's essentially always better to convert before expiration.)
But public company RSUs are as good as cash because you usually can sell them the day they vest. Rule of thumb I think is to favor options from private companies and RSUs from public companies.
There _is_ a "neither fish nor fowl" moment where private companies start giving out RSUs. It has to do with the overall value of the company and the size of the offer package, and rules around how much you can vest in ISOs in a given calendar year. It also has to do with the exposure to employees (and ex-employees) as shareholders pushing you above the cap that requires you to report as a public company.
At any rate, it is fairly common to get RSUs in a late-stage private company. Uber was giving out RSUs 4 years ago, I believe, and has reportedly filed for a confidential IPO as of last month.
> RSUs [...] evaporate if you leave or are fired from the company. You can not purchase them like stock options.
RSUs do not evaporate. Vested RSUs are yours outright. You cannot purchase them because they are already "purchased".
> So you have to stick around until the company becomes public.
In both cases, the RSU or the stock underlying an option, it is equally worthless until there is a liquidity event.
> Oh they also expire in five years
Companies don't even offer RSUs until they are close to being public. Once you reach a certain threshold of stockholders, you have to report financials. Since this is typically undesirable for private companies, they don't want to jump the gun on issuing RSUs instead of options. If the 5 years does pass without IPO, companies re-issue new grants. (Please: name one company that has actually expired RSUs and what happened)
OTOH most stock option grants expire in 90 days upon termination. This is a real expiry, and actual money out of your pocket (and tax liability) to exercies them, and usually a difficult decision. There are some places doing 10-year expiry but those are still the exception.
> The odds of stock options working out is low, but for RSU's they are much, much lower.
It's the opposite. For a private company, RSUs are much much closer to money in the bank than are options.