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Here's another one: When should/shouldn't you exercise options when leaving a startup?

Obviously, if you're leaving Uber you'd be wise to buy your vested equity if you can.

Obviously, if you're leaving a company that is crumbling, you probably shouldn't.

But what about an earlier, Series A/B startup that's promising but still shows a lot of risk? Or what about a later stage startup that is doing well but not on a guaranteed path to a huge exit? On what information would you decide whether or not to exercise?

At the same time, if I was an early Uber employee and the difference between current value and exercise price is in the millions of dollars, then I'm on the hook for a tax bill I can't afford. Are there any solutions beyond taking out loans to pay my taxes?

Services like EquityZen can help find buyers for your common shares to offset the tax liability.

Don't you have the option of sell to cover? You basically exercise all of the options, then sell a proportion to cover the taxes?

Uber doesn't allow secondary sales to 3rd party but will repurchase your shares at their previous fundraising round price.

That's their current policy.

I was going to say the same thing -- but if your company is not yet public, that might not be easy to do.

Some banks will give you a loan with the private shares as collateral. However, you may have a margin call on your hands if Uber has a downround.

If you were an early employee, you may have had the option to exercise your options early (while being an employee. Only being able to exercise your options when you leave is a myth -- one that I used to believe myself).

If you were an early employee and the difference is millions of dollars, I would suggest you stay at Uber until you can sell your shares. It's worth it at this point, and you getting a loan to exercise the shares represents a crazy risk.

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