The AMT is a parallel tax system meant as a fallback to prevent excessive tax avoidance.
Back in the 1960s, some Americans got so good at legally not paying taxes that Congress enacted the AMT in 1969. Instead of going through the trouble of fixing the tax code and closing loopholes, federal lawmakers decided that this patch was a better solution.
The vast majority of Americans will never encounter the AMT. Unfortunately for startup employees, one of the factors that drives up your AMT is the exercise of ISOs.
While not normally taxed, exercising ISOs does increase your AMT. Exercising enough ISOs may put your AMT above your regular tax liability, forcing you to pay the additional tax.