Given the numbers you've presented, then yes, it seems like a bad deal for an early employee. But here's how I think the market may correct for that: 1. If I'm

Given the numbers you've presented, then yes, it seems like a bad deal for an early employee. But here's how I think the market may correct for that: 1. If I'm a startup founder, I want to recruit smart employees. Smart employees will do the math you describe above, and they'll know if I'm offering a raw deal. So, in order to attract smart employees, I'll have to offer a fair balance of equity and cash. If I fail to do that, I won't be able to fill my job openings. Or, I'll fill them with people who are irrational or bad at basic math, neither of which would help my company succeed. 2. If I'm an employee, I'll be weighing more job offers than just the startup's. I'll have high-paying jobs at established organizations available to me. If you're offering $70,000 at 80 hours a week, and MegaCorp is offering $120,000 at 40 hours a week, you need to offer something to make up for that enormous difference. If that something is equity, it needs to be a decent amount of it, and you need to convince me of its future value. If you fail to do that, I'll go work for MegaCorp. Granted, there are plenty of people who won't reason this out. Employees sometimes accept a bad deal without realizing it. But as a business owner, I want employees who are capable of making smart business decisions, even if they're not in an executive position. I'd much rather pay fairly than build a company entirely from the subset of people that I can scam.