&gt; After the 409a valuation of the startup gets too high, this option becomes much harder for employees<p>(Disclaimer: I am not a lawyer, not your lawyer, this is not legal&#x2F;tax advice, etc.)<p>As I understand it, it&#x27;s not just the valuation, but also the tax implications. If the options (as <i>granted</i>) are worth more than a certain threshold (~$100K), you can&#x27;t early-exercise them without losing ISO tax treatment on the value in excess of the $100K threshold. This threshold is on an annual basis, so not exercising them early means that you quadruple[0] the amount that will be eligible AMT (which is preferable to ordinary income tax).<p>[0] Assuming the standard vesting schedule, in which 1&#x2F;4 of the shares are made available each year