A good start, but I want to add more.<p>This may seem unrelated, but there's a difference between poker and slots. Both are "gambling", but one has a performance effect and one doesn't: if you're good at poker, you can make money at it (of course, many people lose). With slots, there's no skill. If it's viewed entertainment, fine; but don't think it should take a major place in your lifestyle because it's just going to lose you money. Playing slots is not a sound financial move. For some (top ~2% of poker players) poker is.<p>I'll get back to that.<p>Now... let's say that you're a typical 28-year-old programmer making $120,000 per year in a cushy corporate job. Your financial advisor comes to you, one day, and tells you that you should invest $30,000 of your annual income in penny stocks. Not only that, but it's a <i>single</i> and <i>illiquid</i> penny stock, with tax implications you don't fully understand. Oh, and the company issuing it is your employer and has about a 20% first-year chance of firing you without severance ("for performance" because tech startups never do an honest layoff; they'd rather hurt your reputation than theirs by admitting contraction) and invalidate your investment (called "cliffing") outright. That's your financial advisor's proposal: buy illiquid penny stocks from your boss.<p>What would you do? You'd fire the fuck out of that financial advisor, that's what you'd do.<p>Yet there are plenty of people who'd work for $90,000 (instead of the $120,000) plus "equity" whose expected value is much, much less than $30,000-- maybe $10-15k at-valuation, from the perspective of VCs who have a much higher risk tolerance, who also get control of the company and preferred shares in the deal.<p>It's a shit deal. Don't take it.<p>Now, back to poker vs. slots. If you're a founder, your equity holding (which is likely substantial, unlike typical employee bullshit) is more like poker, because your performance at your job can have a macroscopic effect on the company. Your ability and performance directly affect your payoff (of course, there's a lot of luck, too). You're still gambling in the abstract sense that everything (even driving) is a gamble, but you're taking bets on yourself, which any self-respecting person would do.<p>If you're an engineer or, really, anyone outside of the top O(N^0.25) executives, you're playing slots because nothing you do will have a real effect on the macroscopic performance of the firm. You're betting on people and factors over which you have no influence. Even whether you get that full that 4 years or are fired first is (let's be honest here) outside of your control.<p>Employee equity is a nice-to-have for an otherwise good job paying a market salary (if not above-market, to account for startup risks) but it doesn't justify taking the kinds of pay cuts involved at most of these startups.