He's talking about founders, not employees. Made up numbers, but say you get 500,000 from investors. And the going rate for engineers is 100,000. Two founder

He's talking about founders, not employees. Made up numbers, but say you get 500,000 from investors. And the going rate for engineers is 100,000. Two founders can take a salary and hire two, maybe three, employees. If they can afford not to take a salary, they've doubled their staff size. Since each one of them owns 25% of the company, it may be worth the risk to them. It's obviously not worth the same risk to the first round of employees, who each end up with 2.5% of the company.