> Did I screw up by not exercising the options earlier this year? Not really. At the time it was obviously more of a gamble, so it may have been a smart move t

> Did I screw up by not exercising the options earlier this year? Not really. At the time it was obviously more of a gamble, so it may have been a smart move to keep your money in the bank. > my understanding is that I'd be taxed on the current value Correct. So assuming that the FMV of the company for your common stock is about 1/3 of the 40M, and you acquired 3% of that, the government now thinks you just made (40M*0.03/3) = $400k, and they will expect you to pay tax on that as income or AMT in your 2015 return. So unless you have a few hundred thousand dollars lying around, it's too late, don't worry about it. You still have another 9 years to wait around and see whether the company makes it big time, at which point paying tax will be the least of your worries.