I've been in this situation a couple of times - as Alice. What it tended to come down to was my other opportunities were well-paid jobs that I could take but th

I've been in this situation a couple of times - as Alice. What it tended to come down to was my other opportunities were well-paid jobs that I could take but that didn't have the potential pay-off of a startup. Because most startups fail the choice was between high guaranteed income + not much fun or a lower income, more risk and more fun. The answer in both cases was that Bob produced a sliding scale of salary vs. equity. The more salary I took the less equity I got. If I wanted the startup life without the risk I took a bigger salary and got less equity. The only question then was what the top and bottom ends of the scale looked like. As the other comments point out, risk is a dynamic and subjective thing, so it makes sense to review the ratio from time to time to make sure it's reflecting reality.