Everyone going to work for a startup needs to have someone explain this stuff, to the point where you understand it all in detail.<p>What it doesn't say is that founders usually elect 83(b) - they buy their shares up front - spending something in the realm of $1K per 1% is a great deal and not that big a risk.<p>Also take particular note of the warning about taxes - during the dotcom boom (and bust) caught a lot of people - some people who were encouraged to buy company stock as stuff boomed borrowing money to do so, then it all busted - they had no jobs, owed on the loans and owed the IRS the taxes - as I said above understand this stuff in detail before you sign anything