David E Weekly has recently published his third edition of the very definitive guide: An Introduction to Stock and Options for the Tech Entrepreneur or the Startup Employee. Mr. Weekly is the founder of a few companies, and an angel investor in several as well. To say he has an insider’s view of startups is an understatement. He started as a developer, and has compiled the minimum you need to know when joining or starting a new company. If you’re wanting to learn about compensation at a startup, you’d be wise to read his Introduction.
From the Summary:
Thinking about joining a startup? Ask for a hiring bonus equal to the exercise cost, early exerciserights, and NSOs instead of ISOs. Exercise as soon as possible and ASAP ﬁle an 83(b) Election.Recently hired? If you can afford to fully exercise your options and are permitted to do so, ask to get your ISOs converted to NSOs, perform an early exercise, and ﬁle an 83(b) Election.
If you don’t have the background to understand that summary, read his paper. It will explain in detail what all of those terms mean.