Founders generally do give themselves options instead of shares for tax purposes. The reason investors get shares directly is that they’re buying them, not earn

Founders generally do give themselves options instead of shares for tax purposes. The reason investors get shares directly is that they’re buying them, not earning them as income. There are plenty of ways to screw over unsophisticated minority shareholders in a funding round or acquisition even if they have the same class of ownership as the founders. The main disadvantage of options for employees is that they have to pay to exercise them, but the company can trivially make this a non-issue by setting the exercise period to 10 years.