Let me start off with, I agree with you, the salaries and equity seem a bit low. $125k is a bit high though, a few of my friends who went straight to Google out

Let me start off with, I agree with you, the salaries and equity seem a bit low. $125k is a bit high though, a few of my friends who went straight to Google out of college only have a salary of $95k - $125k. However... 1) Funds are limited, yes that's not a lot of money, but I have several friends who went to work at startups because they enjoyed the atmosphere. 2) A fair number of people accepting those job positions have zero experience and/or dropped out of college. 3) Some of the people who join startups at those wages are based out of other countries, where those salaries are massive. I know two people who are working remotely for starups in that fashion and they love it. 4) 1% equity is very, and YC is pushing to increase that. However, if it wasn't working they wouldn't/couldn't do it.