There are hundreds of new technology companies every year. Many of these companies start out with little cash but they need to hire programmers and sales people. Because of all the stories circulating about how people made millions of dollars from stock options in the 1980s and 1990s it is now customary for companies to offer stock options to new employees as a way of enticing them to take otherwise low-paying jobs.
Having worked for stock options a few times over I have to say I think they are a highly risky choice. If you can afford to live on your salary for the next 2-3 years then the options may work out for you. But tech startups are high-pressure companies and they experience a lot of turnover. If your options have not vested you lose them. If they HAVE vested you may not be able to use them if you have to buy them right away and don’t have the money.
It is better to negotiate the best possible salary up-front. Ask for a hiring bonus, ask for annual bonuses, semi-annual bonuses, etc. Stock options are a company’s way of saying, “We don’t have any money to spare and we want you to bet on our success.” Their eventual success is more likely to happen than your eventual rise to millionaire through their success.
You can look for companies that offer employee stock option plans, where you have the opportunity to buy the stock at a discounted price. It is, in fact, better if you choose a company that has passed its IPO. Yes, the people who would become millionaires have already hit that paydirt but most employees of tech startups never become rich.
If becoming wealthy is that important to you, then you should start your own company and build up its value so that you — as majority shareholder — benefit the most when the company is bought out or goes public.