[payne92]

TL DR: The author argues that startup options are "better than they look" because you can quit (and keep your options) at any time.

The model is extremely naive: it doesn't account for (a) dilution due to continued investment, (b) investor preferences, and (c) (perhaps the most important), most options need to be exercised (or forfeited) shortly after departing.

A departure situation can trigger a significant out of pocket payment: from the actual exercise price PLUS a possible tax trigger (AMT in the US) that gets larger as the company value increases.

Many employees that leave with vested options often can't afford to exercise them (or all of them).