> Everybody involved is taking some fraction of that risk. I think that by "that risk" you're talking about "the overall increased risk of investing in a new c

> Everybody involved is taking some fraction of that risk. I think that by "that risk" you're talking about "the overall increased risk of investing in a new company". I deliberately use the word investing because that's how employees should think about their participation in a startup: They're usually giving up something now... salary, extra work hours... in exchange for some possible upside in the future, often in the form of stock options. To state what you're saying another way: A lot of employees do not correctly assess the risks of the investment they're getting into, for example, of not having direct control over the date when a salary increase will occur, or whether that salary would be in the form or cash or shares. In short, employees often invest themselves into investments (i.e. startups) that bring far more risk than they can personally tolerate. Avoiding startups completely is one solution. Another is to really start thinking like an investor: Personally, I like to consider whether I would be a passive investor in the company (i.e. just write a check)... If not, it's a sign that perhaps the company is not a good addition to my portfolio overall, and I'd be better off taking the cash from another employer and investing in something I do believe in. (Aside: I've seen some pretty good "rent or buy your home" calculators out there, but never a good "work for a startup or an established company" calculator. If anyone can recommend one please reply.) Edit: https://triplebyte.com/startup-equity-value-calculator https://triplebyte.com/startup-equity-value-calculator