I've worked at 2 startups where we bought our private stock for $0.001 (tenth of a penny) a share. It had some internally made up value and we pad taxes on the

I've worked at 2 startups where we bought our private stock for $0.001 (tenth of a penny) a share. It had some internally made up value and we pad taxes on the difference. It was explained to me that if we had an IPO in the future that the taxes would be long term capital gains rates instead of short term because we had held the stock over a year. In the end I spent $200, both startups failed, and I lost my $200. It's more of a silly story and a warning against believing anything startup founders tell you.