Your potential payout is your number of shares x the share price. So let's say that comes out to $100K. You have to discount that to present value. Money is

Your potential payout is your number of shares x the share price. So let's say that comes out to $100K. You have to discount that to present value. Money is worth more now than it is in the future. Assuming an interest rate of 5% and there being a liquidity event in 5 years that is (1.05 ^ 5). So $100K in 5 years at 5% is worth $78K now. You also have to factor in risk. There are various models but I like to simply multiply by the probability of exit. So if there is a 10% chance you will see something then I take the $78K and multiply by 0.10 which comes out to $7.8K. Also, if you exercise early there is even more risk. Let's say you paid $10K for them. That $10K invested at 5% would have netted $10K * 1.05 ^ 5 = $12.8K. So you are risking $12.8K to make $78K. But I would compare it as $12.8K vs the adjusted average expected return ($7.8K).