The weird thing is that this state of affairs (a) doesn't save investors very much dilution. Meanwhile, (b) options do a much poorer job of motivating/recruiti

The weird thing is that this state of affairs (a) doesn't save investors very much dilution. Meanwhile, (b) options do a much poorer job of motivating/recruiting employees, (c) an even worse job of aligning interests and (d) the risk/downsides aren't reduced at all. If stock "values" start to drop, it can really make a company feel like a sinking ship. That's the risk of equity sharing. They can make bad times worse. This happens no matter how distant/unlikely a liquidity event is. The solution has been mentioned all over this thread: make them liquid somehow. Alternatively, stop doing options and do something else instead. Aren't startups supposed to be breaking conventions and being creative? I agree this Steve B's implication, the average stock option scheme is a vestigial artefact. Unless you're in a position (and of a mind) to negotiate terms, it's a checkbox.