I definitely echo the feelings about compensation at startups. They massively over-value their equity because there is no risk adjustment, they just assume that

I definitely echo the feelings about compensation at startups. They massively over-value their equity because there is no risk adjustment, they just assume that the face value price of the shares is how you should be valuing the equity, which is obviously total nonsense. One surprising thing I encountered when leaving a startup was that non-startup companies would value my startup equity at zero when presenting offers, making that deal even worse. I definitely felt like the founders were being completely disproportionately rewarded to everyone else, which drove some amount of resentment on my part. One of the pet ideas I have is that founder/employee shares should have some sub-linear returns with the value of the company, with the gap being redistributed to people down the value chain. E.g. once the founders have gotten a few million from their shares, part of the returns should start going to early employees, and once they have some amount of money it starts going to later people, etc. Another idea could be for employees to be paid with options for an entire YC batch, rather than a single startup to reduce the risk associated with being paid in equity for a single startup. This is tricky for various reasons, but tries to reduce the risk without meaningfully changing how much capital is needed. When I lived in the Bay Area I was pretty surprised by the amount of startups in the South Bay, living in SF and then Oakland, I basically refused to commute down there because of the shitty transit situation. There are "pros" for startups, but most of them depend a lot on what the alternative is, if your alternative is a high performing team at a well paying company, there aren't a lot of things in the pros column, but if your corporate job doesn't pay great or is sucking the life out of you, then startups could be great in comparison. So maybe the right way to frame this is more of an "is this right for you" question, than is it objectively good. [EDIT]: Providing ways for employees to cash out their equity would do a lot to de-risk things too. Particularly for employees who have are leaving and there is little reason to keep them aligned and are willing to make space in the cap table.