This is a hard questions to answer. If you exercise now you can convert that stock into shares that after a year will change from short term to long term invest

This is a hard questions to answer. If you exercise now you can convert that stock into shares that after a year will change from short term to long term investments and thus lower your tax liability on the difference of the option price and the market price. But, you will be risking the money that you use to exercise those options, ie if the company doesn't exit, or exits where only the preferred stock is payed out, then you will lose all of that. IMO, this risk is not worth the tax savings, unless you have a ton of money to spare, in which case why even care about the taxes. Hold the options until there is a real market for them, it's the least risky option.