So the tl;dr is: 1. Startups take longer to IPO, if they ever (objectively true); 2. Liquidation preferences for VCs and preferred stock for founders may make

So the tl;dr is: 1. Startups take longer to IPO, if they ever (objectively true); 2. Liquidation preferences for VCs and preferred stock for founders may make a certain amount of sense (other comments have addressed this) but given (1), this is generally a horrible deal for employees. 3. Any employee should outright refuse to join a startup where the agreement has any kind of clawback or any exercise period less than 10 years after the termination of employment. If you're worried about diversity of ownership then put in a right of first refusal into the contract. That's fair. 4. E(TC) for a moderately qualified SWE at Big Tech is >$350k. Given all the above if E(TC) at the startup really needs to be at least twice that (hint: it isn't). 5. For every story of a Google chef becoming a millionaire there's 10 stories of a Mark Pincus type who threatens to fire employees if they don't surrender some of their (unvested) options.