I have been working at a start-up company for the past 4.5 years in the US. The company is still private. It is not going to go public. The owners are looking to sell once they get a good offer. I don't think they are going to sell in the next few months, but maybe in a year or two.
I was offered stock options for 20,000 shares at strike price of $0.11 when I joined (vested for 4 years). These are fully vested now. I got 5000 more shares a year later at a strike price of $0.25, again vested for 4 years. I haven't exercised any of my options yet. I heard unofficially that at the last funding round (about a year back) the investors purchased shares at a price of $1.75 per share.
My question is this: if I buy all the shares that have vested, then I will be paying the company around $3100 (20000*0.11 + 3750*0.25). I have the money to buy. Assuming the company is not sold within a year, I believe I need to only pay the long-term capital gains tax when the company sells, right? But if I do not purchase the stocks now and the company sells later (assuming I still work for the company), then I believe they will just deduct the strike price and give me the profits, but this will be taxed as ordinary income? (I am at 33% tax bracket; married filing jointly).
I believe in the people running the company i.e. that they will make sure their own money and efforts do not go waste, so is it a wise bet to buy the shares now to save on taxes later?
What advice would you give in case I am leaving the job in the next few days? Believe I have maximum 90 days after I quit to buy the shares.