I would argue that a significant portion of that compensation is essentially a gamble that the company is going to blow up and become huge. Sure, because many

I would argue that a significant portion of that compensation is essentially a gamble that the company is going to blow up and become huge. Sure, because many engineers don't ask "the tough questions" about what their equity actually means, or even how many shares there are. They gamble poorly, taking a $40,000 pay cut, and working long hours, for equity less than 0.1% of the company. My attitude toward equity is that, unless you're a founder, you shouldn't let it change what salary you accept, how hard you work, or how you prioritize your career goals. If you want to work 70-hour weeks because it's helping your career, go ahead. But don't make sacrifices unless you're a founder. Otherwise, it's not going to be worth it. These days, founders and VCs don't offer equity at a level that would justify any attitude other than free agency. That's the area where people do have leverage, because startups are cash flow constrained and can't afford huge salaries - but that doesn't mean you won't get rich (that's the line they sell us, anyway). Of course, there are people who get rich on startup equity. It happens often enough to keep the myth alive. However, there are much better and surer ways to get rich. Valley engineers take it as an extremely fortunate windfall. VCs take it for granted. And honestly, I don't think there's much to recommend the VC-funded founder career over being a VC if you've got the connections for the latter. A founder is a mid-level product manager in what is the first postmodern corporate organization; but VCs are executives. Silicon Valley is a fine place to spend your 20s while you figure out what you want to do with your life, but if you want to stay in that world for the rest of your career, the best way is to become a VC and be a real first-class citizen. They're not that rare - there simply aren't enough founders to support the astronomical housing prices in the valley otherwise. Software engineers aren't buying those houses. That's a mix of VCs, career executives in the startup world (who don't program and don't found, but get paradropped in, by their buddies in VC and private equity, to companies with executives) and house-rich natives and corrupt overseas officials. Sure, there are a lot of rich people (managers, founders, VCs) in Silicon Valley. There are also a lot of programmers in Silicon Valley. The intersection between the two groups is very small. From Game of Thrones: "there are old sellswords and bold sellswords, but no old bold sellswords." The Valley is constrained by the extreme NIMBYism and that, combined with price inelasticity and low interest rates, is what makes house prices so high.