The thesis of the article is mostly correct, though there are plenty of exceptions in the valley - the Facebook and Google IPOs made 100s of instant millionaire

The thesis of the article is mostly correct, though there are plenty of exceptions in the valley - the Facebook and Google IPOs made 100s of instant millionaires. This part bugged me though: "Lets put it this way. You're working at a start-up. You've got some decent stock, say, like, 200,000 options. You vest over four years and your strike is $1/share (which is WAY too high for an early employee, but you feel "good" about this one.) You're making 50k under market value." Number of options and strike price are almost meaningless without context - specifically, number of shares outstanding + ESOP pool. PPS is derivative of the number of shares outstanding, and strike price will typically be the PPS at the last round of financing, so whether it's $1 or $10 or $0.10 is _completely_ determined by the valuation of the company divided by the number of shares outstanding. The number of shares outstanding (+ those allocated to the ESOP) is the meaningful number here. 200k options could represent a significant stake in the company (up to 99.9995% of the company, for example, if the company has only a single share outstanding and no other options issued!) or an insignificant stake in the company (for example, if the company has 1 trillion shares outstanding). The only thing the 200k options / $1 strike price tells you is that if the company doubles in value, you will have made $200k (less taxes & tip). Triples in value, $400k. Multiples by X, $200Xk. If you don't think the company is going to double/triple/10X in value during your time there, don't play the game.