This is not an uncommon arrangement in companies that plan to remain private forever, or just have no rush to IPO. Without some exercise clause, it's hard to co

This is not an uncommon arrangement in companies that plan to remain private forever, or just have no rush to IPO. Without some exercise clause, it's hard to compete with public tech companies on compensation: I've seen way too many people stuck in companies that they've worked on for 4-5 years, but when leaving meant throwing away all the stock compensation, as the costs of exercise are not affordable without a seller. Typically companies in those situations have investors from earlier rounds that want to increase their holdings, and the board doesn't have a problem letting get a percentage or two of extra shares, so they create some kind of liquidity opportunity, with the company serving as an intermediary between the employees and the investors.