[sytelus]

One problem with startup RSU is limited liquidity. If you got $1M RSU and have 25% tax rate then you need to drill a hole for $250K in your bank balance right away. If private market exist and you can sell 25% of your grant, that probably works but otherwise the $1M RSU sits there just looking pretty next to that ugly hole you just drilled. Now if company goes down for any reason then that's $250K not coming back possibly not just making you work for peanuts but you might have paid out of pocket to work at that company, i.e., received a negative salary. With stock options the same outcome could occur. The great outcome occurs if you got stock options and stick around all the way until successful exit. This would be desirable by founders and investors but things may not be under your control because, you know, life happens.

This basically means that to avoid negative salary outcome startups must arrange so at least portion of grant can be sold privately to cover tax liability at the time of grant in case of RSUs or at the time of exercise in case of stock options.

If this condition is not met, trade waters very carefully.