There's another effect of the ten-year exercise window.

Remember how Facebook was "forced" to go public because so many people owned stock? (http://www.businessinsider.com/why-the-sec-will-force-facebo...). Well, if there's a ten-year exercise window, some of the people will hold their options and not exercise them. My -- albeit limited -- understanding of the situation is that those people are not counted as stockholders. They have options, not stock.

So the ten-year exercise window is also good for the startup, because it delays the time until the startup has to publicly disclose its financials.