If a company (startup or otherwise) is private, then stock options holders can't liquidate their shares. However, they are still required to pay taxes on the capital gains when they exercise, which can be huge if the company has grown exponentially.
Not only do you have to take the risk of the stock/company crashing and burning but you have to pay in advance the taxes on the "gains" which you can't actually cash out. It's a trap, only thing you can do is stay at your company until liquidity occurs for shareholders.
Not only do you have to take the risk of the stock/company crashing and burning but you have to pay in advance the taxes on the "gains" which you can't actually cash out. It's a trap, only thing you can do is stay at your company until liquidity occurs for shareholders.