That would work for most employees. Founders know much more about their company and don't offer equity if things go well. Equity is a good bargain right before

That would work for most employees. Founders know much more about their company and don't offer equity if things go well. Equity is a good bargain right before the next funding round — when cash balance is low and founders pay with shares. In this case, the question is how much the stake is worth now. Ask founders the share price of the last funding round. That's the closest market valuation you can get. Exit conditions (exercise window, sale restrictions) are a must-know, but secondary. An employee can borrow to exercise options and then sell the shares. His company would love to buy shares/options back because they'll have to consolidate equity upon IPO/sellout anyway. In general, companies go through so much dilution and uncertainty that worthwhile equity stakes start at 5-10% for early-stage startups.