Your description seems directionally correct, but I don’t understand this part:
> You are making an investment … just like any other investor, albeit with a lot less favorable terms. The best part is..guess what? If your circumstances change and you want to move on to a different job, you are now getting to choose between staying with the company until it has a liquidation event..or you have to effectively invest in it. Pretty shitty deal!
Why would you have to stay with the company after you vest? Is there some kind of clause that strips you of your share ownership or forces you to sell if you leave the company?
> Why would you have to stay with the company after you vest?
I'm assuming they are referring to someone that _did not_ exercise their options and is leaving.
[you might already know the following based on the rest of your comment, but thought i'd add it]
With options, vesting is only half of the story; you need to exercise the options which converts them to shares. ISO options (what you get as an employee) have a PTEP (Post-Termination Exercise Period) that gives you 90 days from voluntary leave (maybe varies?) to decide whether or not you'll exercise. If you don't exercise, you forfeit them.
I believe the longer PTEPs that you hear about (5-10 years) do some ISO->NSO conversion which changes the tax situation, but at least gives you flexibility & wait for some liquidity event before committing the cash.
That must be correct. The phrase “You are making an investment… “ followed by a discussion of whether or not you should invest threw me off.