I'm a vote for never, ever buying options in a private company, unless you're confident you know what the outcome is going to be --- that there's an imminent liquidity event, that you know what the numbers are, you know the VC's prefs, and you know where your shares are relative to the outstanding shares.
When I left my last company, they told me I was crazy for not buying my vested options. Multiple times over the following 3 years, coworkers would IM me and say, "I really wish I had convinced you to buy those options! Big stuff is coming!"
And it has: they bought another company, got revenues to the point where only 3 companies in the world can afford to buy them, and are digging in for the long haul towards an eventual IPO, where all the shares will get reset anyways.
That's not even close to a horror story. The real horror story is, you buy your options, the company exits 2 years later, management and investors get all the money, and current employees share a retention pool. You put your money in VFINX, you get 3-5% returns. You put your money in private company options, you lose it all.
When I left my last company, they told me I was crazy for not buying my vested options. Multiple times over the following 3 years, coworkers would IM me and say, "I really wish I had convinced you to buy those options! Big stuff is coming!"
And it has: they bought another company, got revenues to the point where only 3 companies in the world can afford to buy them, and are digging in for the long haul towards an eventual IPO, where all the shares will get reset anyways.
That's not even close to a horror story. The real horror story is, you buy your options, the company exits 2 years later, management and investors get all the money, and current employees share a retention pool. You put your money in VFINX, you get 3-5% returns. You put your money in private company options, you lose it all.