Makes me wonder about how their investment in effort has carried out over that time. I'm sorry, but X shares over Y time with additional investments of A, B or C, usually means X means a lot less (percentage-wise) for a continuation of effort.
This is a throw away account for a couple of reasons...but I wanted to make a point from the engineering grunt point of view...
>The value of incentive stock options is simply the value of
>being able to profit from increased market cap without having
>to actually risk or tie up any of your own money.
That may be true of the value of the option from a purely market point of view. That said, unless you are part of the rare group who is part of a facebook, twitter, or related that can actually trade on the private markets before an exit event.
The reality is, most engineers working for a startup are gambling their time and efforts for a single investment. More often than not, those investments of effort and time do not always result in much of a return.
From experience - a number of startups will push for rates that are "below market" for the promise of returns. That said, in the same time, day to day engineers (not the founders) who have experienced an exit has been on the order of basically $20-30k/year (over the term of one's employment). Often finding an arrangement with a more established company will result in a better return during the same time.
If you are in the market to join a startup for the exit, weigh your options closely. If you are in it to learn, work with a close bunch, and want to build something interesting, by all means pursue it.
Joining a startup is an investment of time and effort, you should not enter as a non-founder with the expectation of a monetary return. Most fail.