Bought shares for about $2k (1 penny strike price) 2 years before IPO, now worth $20M. Later joined another startup, bought shares just after 1 year cliff, got acquired 6 months later. Made about $80k.
Taxes can be tricky. For each stock, you have:
* strike price: your cost
* fair market value: the "value" of your stock when you buy, usually set by a 3rd party
When you buy your stocks, you pay taxes on your virtual gain (fair market value - strike price). So you may have a huge tax bill to pay years before you can make any real profit.
On the other side, in the US, if your stocks qualify as small business stocks (you bought your stock when company had < $50M in assets and hold them for 5 years), you pay no federal taxes on first $10M.
If you buy your share early, less taxes to pay, possible QSBS, but might be a loss. If you wait longer, your options might expire (typically after 10 years), higher tax bill (as FMV increases) but less uncertainty about the value of your stocks.