You do have to pay to own a portion of the company. The founders did not have to do this. The strike price is set when they give you the options. If they vest o

You do have to pay to own a portion of the company. The founders did not have to do this. The strike price is set when they give you the options. If they vest over 4 years, the strike price is decided when they are issued, before they vest. The strike price is usually set to the value of the common stock at the time of issuance, so they have a value of $0 (as far as the IRS is concerned) when they are issued. If the company IPOs before you exercise your options, you generally won't have to provide the capital to purchase the shares, as any brokerage will be able to cover that for you (by subtracting it from the sale proceeds).