[JonFish85]

Which is a risk, especially in companies where the strike price is close to $100/share. If it's going to be in the $10k+ range, is it really worth it to potentially reduce your future tax burden? Maybe. But it's also possible that your shares aren't worth that exercise price. Speaking only for myself, in my experience I decided to wait to see if the price was ever justified before buying the shares, and if it means a higher tax, then so be it. Otherwise, if it means walking away from vested, unpurchased shares, so be it.

[rconti]

Yep. Just because you CAN early exercise does not mean you can afford to do so. I was fortunate because I was able to early exercise shortly after grant but when I knew the company was going public. Had to borrow some money to do so, but the couple hundred I probably paid in interest was more than made up for in the tens of thousands I saved in income taxes. It takes the right scenario, to be sure. At the time I had no mortgage interest deduction so I could afford a double-digit paper AMT gain; I was still only subject to normal income taxes. In theory when you leave the company, if it has not gone public, you get paid back the money you put in. In practice, if it goes out of business, you just lost all of the money you put in.

[toast0]

I don't think the strike price is really important, it's the exercise amount that matters. But there's certainly an element of risk, and saving money on taxes is nice, but not losing money is nice too.

[harryh]

Yes it is a risk, and it's worth careful thought. Mainly I just wanted to make the point that you don't have to wait until they vest. A lot of people don't realize that.