[rstephenson2]

Is there some nuance as to how this is set up? The company buying back the stock when you leave seems particularly interesting: if the valuation has changed in between when you start and when you leave, the company either buys the stock back at the new, higher price (in which case you make some cash on unvested stock) or the company buys it back at the original price, and from a tax perspective you are selling it to them priced under fair market value and the company owes taxes on that I think? Is there something I’m missing?

[Swizec]

I've been part of such an approach in the past. The way it worked there (and I imagine would everywhere) is that you exercise your full options, thus turning them into RSUs. You then give the company options on your RSUs at current valuation and the percentage of your RSUs that are covered by the options reduces on the vesting schedule.

[gumby]

Nothing so complicated. Not turning them into RSUs, simply exercising the options to buy ordinary common stock with the company's right to repurchase expiring every month (or whatever the option vesting schedule would be). Repurchase is at the purchase price paid by the employee so nobody owes any taxes.

The point is that whenever you leave you have the same number of shares either way, but this way you pay for them at par (and with 83(b) owe no tax until you sell) and get the LTCG clock started right away. If you pay when you leave you have to pay tax on the delta

This is much friendlier to the the employee, at least when the purchase price is quite low. And why wouldn't I want that for my team?

I've done this with half a dozen companies at least; I don't know why everyone doesn't. The change to the option plan is quite standard and the law firms all know it.

[berberous]

This is almost always a repurchase at original cost (not fair market value). The company does not owe taxes on that.

[gumby]

Repurchase at the original purchase price. No taxes apply to either party.