If startups wanted to convince employees their equity was valuable, they easily could simply by adding protections to avoid many of the bad scenarios. For examp

If startups wanted to convince employees their equity was valuable, they easily could simply by adding protections to avoid many of the bad scenarios. For examples, there’s no good reason why employees shouldnt get preferred shares. The whole reason common vs preferred share distinction exists is so that the founders can’t just immediately sell the company for a bad deal and cheat the investors but employees don’t have that option. They’re told they are not given preferred shares because they’re not risking money the breath after they’re told they should turn down public liquid RSUs at a big company for startup equity instead. Startup equity is very unfortunately broken by design. It’s a malicious feature, not a bug. It’s a shame because many people myself included would pick the smaller company gamble over the big company if the terms were at least fair. But too many naive engineers accept awful financial instruments designed by VCs to screw employees and poison the well for everyone. If you have a choice between public stock and common ISOs you should pick public stock 99.9999% of the time.