When a Unicorn Startup Stumbles, Its Employees Get Hurt (nytimes.com)

"In an investor document about the sale that was distributed to shareholders, employees discovered their Good stock was valued at 44 cents a share, down from $4.32 a year earlier. In contrast, preferred stock owned by Good’s venture capitalists was worth almost seven times as much, more than $3 a share. The paperwork also showed that Good’s board had turned down an $825 million cash offer just six months earlier, in March.

For some employees, it meant that their shares were practically worthless. Even worse, they had paid taxes on the stock based on the higher value."

"Some Good employees actually lost money when BlackBerry bought the company. Good was a unicorn, that is, a private company with a valuation of more than $1 billion. The high valuation increased the paper value of employee shares — and thus the income tax bills levied on their stock when they received the stock grants, or when they bought and sold shares. To pay those taxes, some employees emptied savings accounts and borrowed money."

Isn't a good rule of thumb to pay taxes by selling some of the shares that provided the income?

I'd certainly have reservations about a stock grant that required me to pay six figures of taxes that I couldn't cover by selling some of the shares.