Here's the problem: equity. The offer is just too low: a fraction of a percent. For me to make decent money from this startup (by decent I don't even mean enough to retire, certainly not in the Valley, which would require a few millions) it would have to have an exit of hundreds of millions if not over a billion dollars. These days, very few companies achieve this. I doubt this startup will.

It seems like although the attitudes towards funding and operating startups have changed significantly since the .com bust, the attitude towards equity distribution to employees is still rooted in the delusional .com days. It's just not worth it for a good hacker to join someone else's startup for such little ownership stake. As much as I would like to join them, it just makes much more sense for me to start my own company so I'll have a better chance at cashing out with a reasonable amount of money.

This brings me to the startup risk paradox: working at a startup is riskier for employees than for founders. A founder will do well for himself even if the startup has a modest exit. An employee will only do well at the much less likely event of a fantastic (hunderds of millions) exit. If you're a talented hacker, it's less risky to found a startup than to join one. Sure, you may fail, but if that happens you can always get a job and then try again.

Your thoughts are appreciated.