You are right, YC companies are under-market in the straight line terms of salary and equity. My theory is that many people are willing to work for YC companies

You are right, YC companies are under-market in the straight line terms of salary and equity. My theory is that many people are willing to work for YC companies for less money in the early days. Why? 1. Lower risk (wether perceived or otherwise) 2. Better mobility ("I was hire #2 at prestigious YC company XYZ") 3. Better personal networking ("Hey founder, can you put me in touch with XYZ at YC company Foo") Note - As many people point out, the same engineer who would work at a YC startup would make much less than going to Google/FB, etc. This is a pretty well known fact.