There's absolutely no reason companies can't issue options that automatically convert from ISOs to NSOs after the 90-day period, and leave the NSOs on the table for ten years. There is no downside to the employee or, really, to the company – other than that the options, which were pitched to employees as part of comp, aren't clawed back to the company's pool as quickly.
I've observed many startup founders who are disdainful of employees who leave, ever, for any reason, and definitely don't want them to receive proceeds from any of the company's future successes.
Not gonna sugarcoat it - this is weak. Companies don’t offer this solution that’s better because it’s “complex”.
This is like when engineers say something is going to take a long time because “there’s a lot of moving parts”.
The reality, IMO, is that employees do not have a seat at the table when it comes to negotiating ownership shares. And, predictably, they end up with the worst part of the deal.
I've observed many startup founders who are disdainful of employees who leave, ever, for any reason, and definitely don't want them to receive proceeds from any of the company's future successes.