> If I had $400K in cash, I wouldn't spend it all on shares in this company - it seems to risky to me. This is your answer. Your investments really don't care

> If I had $400K in cash, I wouldn't spend it all on shares in this company - it seems to risky to me. This is your answer. Your investments really don't care if they started as stock options or were bought with your own cash. And neither should you. You would be effectively spending $400k on start-up equity. I know it doesn't quite feel that way when the money doesn't go through your own bank account but the effect is the same. You need to have very high risk tolerance to choose equity over cash in this case.