There is a difference between a "private" company and a "startup" the problem with startups is they mainly hire younger workers that are willing to take two trigger private stock options that will almost never trigger. Only the equity investors get single trigger options for when the company gets bought by a big player based only on the valuation (that's the end goal of startups 80% of the time).

While a truly private company (think Harbor Freight, etc) will be focused on building the business not the valuation and if they do offer private stock as a cash build it's very limited but single triggered. It's almost always bought back in a buy back so no loss of money typically.

I tend to work in the large corporation side which is a different beast altogether. I did just get bit by a tiny little startup but I knew that was coming from the start. It was an easy 2 year pay-day.

Presumably when you were an employee you understood that these equity-pay structures were basically a lottery. And no, it would seem you didn't hit it. Like any lottery there's an element of unfairness built in.

Personally I wouldn't bother. I think if you do the math in time, money for lawyer, likelihood of success, you'll find that walking away is your simplest, cheapest, outcome.

You made your first mistake working for valueless equity. Learn from that - write it off as education. And hey, who knows, maybe they will IPO sometime...

Staying years at an early startup in exchange for paper money (and having to pay AMT + exercise costs) is one of the biggest regrets in my career, I truly don’t know what I was thinking.

I still have a bunch of this paper junk and I wish they’d at least go to $0 so that I could claim a capital loss on my exercised cost basis, but they are stuck in zombie land.