Is this a bad situation?
fuelfive: The tax liability thing could be real. Has the company received a valuation in the time since you started working? Let's say that you took a series A with a 5M post-money valuation. Then, your 1% would show up on your tax returns as $50,000 of income. What I would do is ask the company to take the tax hit on my behalf. IANAA, so YMMV.