Exchanging Cash with Late Stage Startup Options
A friend owes me about $28,000. They work at a late stage startup which is doing well based on growth numbers, and can IPO in a few years. We thought about exchanging 28k with the equal amount from the startup options, since they're short in cash and it can take a while for them until saving up that money, given other debts they have.
Since the startup is in breakout stage, it can get even 5-10 times the current value. On the other hand, there are obvious risks. I'm actually a user of the product and find it very useful, and I know very smart people working there, but you never know how finances can go.
Given that we are very good and close friends, and I trust them %100, do you recommend taking this deal?
What actions should I take to formalize this, in case I wanted to move forward?