This is one of those topics that early startup employees and founders should get right, but I always find it frustratingly hard to nail the details correctly.

Disclaimer: this is not tax or legal advice, please consult your own experts.

In an effort to make the trade-offs a little clearer (and for my own reference):

If you are an early employee at a startup (e.g. you’re getting options with a very low exercise or “strike” price) and if you’re paying taxes in the U.S., then you have an opportunity to “early exercise” your not-yet-vested options. …

Teddy Cha

CEO/cofounder of

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