I am approaching my first full year at a startup and my options cliff for 25% of my options. Should I exercise that 25% immediately or let it sit? What are tax repercussions on exercising vs. not exercising?
IANAL. Advice is worth what you paid for it...<p>There is hardly ever any valid reason to exercise your options before an IPO or similar equity event. There is a small tax benefit to exercise and hold them for at least 1 year, but there is HUGE risk in the value being wiped out or diluted.<p>There <i>can</i> be a small benefit in being an actual shareholder, as you are supposed to get minutes from the board meetings. But, you don't need to exercise all your options to do that, $1.00's worth would be enough.