If so, and there is a gap between what you paid, and what your 409a says the value of the shares at purchase time, you owe tax on the difference, now.

And you are saying that the company also has an options contract to buy back those shares? why?

It feels like either this company is trying some advanced scenario with a bit of risk, or doesn't actually understand the value of options.

Why go through all of that when they could just give you options?

There’s nice tax advantages to this approach if you make an 83b election since the shares start counting toward long-term capital gains immediately.

Reverse vesting seems way more straightforward: you sign, you get equity immediately, company can take back any at agreed upon price at whatever intervals defined in the contract.

Reverse vesting is pretty common for founding employees, or near then, also, ime. The only problem is if the share value isn’t justifiable very low, it can be too expensive.

The moment you raise any significant amount , the implied valuation may make this impractical.

Any company claiming to be employee-friendly should offer this while its 409A valuation is low. 10-year exercise windows take care of the people who come later and should also be standard at this point.