I would not be OK with this policy even if it was spelled out, doubly so because it was a prospective series C investor that wanted it added to the existing (re

I would not be OK with this policy even if it was spelled out, doubly so because it was a prospective series C investor that wanted it added to the existing (retroactively) and future options agreement. People often convince themselves that startups will IPO or whatever because that's a pre-requisite for joining one. People don't always make great decisions. Part of being a good person is accepting that caveat emptor is not an ethos that people should embrace. I talked with an engineer - most excellent - who was employee 1 at a startup that, at one point, became worth close to a billion dollars. He did not early exercise because they flubbed their 409a evaluation and his share would have been a $100k+ commitment at the time, and he'd just come out of two startups back to back that had failed after he'd EE'd and gone to zero. At year 6, he was absolutely almost ready to gnaw his own leg off, but he stuck it out to the IPO. He was absolutely miserable, he wanted to go. They would not convert his shares to NSOs and he could not afford the multi-million dollar tax bill he'd receive if he ee'd then. Good thing, though. It was grueling but he got through it and they did IPO. And then they crashed to essentially zero before the lockup expired and he got essentially nothing.