The majority of comments here seem to argue the ideal equity share for employees is zero, since it probably won't be worth anything. That seems like an even more founder friendly viewpoint, no? Mass inequality of ownership is how we end up normalizing the corrupt billionaire class. I agree with you we need an industry desire for better ownership terms, but instead I see people arguing employees should just take a salary, look the other way, and let owners hoard all the spoils.
That is not what people are arguing. Labor sellers should assume equity in a non publicly traded company is worth far less than the labor buyer wants the labor seller to think it is, so labor sellers should demand more cash such that the compensation is competitive with other potential job offers that offer more cash.
Don't get sucked into blind rage over nothing. Why do most employees nowadays prefer cash over options in startups? because for every successful startup where the secretary got a vineyard there are 99 when the startup limps along for 12 years and then closes without a sale. Generational wisdom turned into "Dont get suckered for low wage and options, get a high wage and invest in the S&P".
Will there be lucky founders that become very rich? absolutely. Founders are generally very risk aggressive and are willing to go boom or bust. But for an average person that just want a good life why risk lower living standards for a low change of riches?
If you are very risk aggressive you can push for more equity, but expect your salary to be much lower than your peers. Most veteran SE will advise against it.
Earning a salary in cash doesn’t stop you from investing the cash. I have never earned equity from an employer but most of my net worth is sitting in publicly traded companies. So obviously I am not lacking company ownership just because the company I worked for didn’t loop me in.
The other reason this isn’t true is that equity becomes a lottery ticket that is written in a founder and investor-preferred manner and is used to fleece mostly young employees who don’t know better and are romanced by the thought of being a part of the next Uber or Airbnb.
The practical reality is that it becomes “this job is worth $150,000 but we’ll pay you $100,000 and you can have some equity that might be worth hundreds of thousands if the casino pays out.”
But then you have investor preference multiples, valuation fuckery, and other ways that even a successful exited company can pay out less than your fair share.
To me cash is king because I can invest it however I want. Equity is fine if it’s for a public company, as that’s effectively just deferred cash as an incentive to stay longer.