Question: I keep reading about joining a small start-up, keeping it up until it grows and then reaping the rewards.
However, the way I see it is that investors and shareholders will be reaping the rewards, while overworked employees will get a promotion at best, and they could have gotten that promotion in many other companies. Some make millions, some make 10K more per year.

Shouldn't "reaping the rewards" include seeing your equity/shares become much more valuable? If so, should one join a start-up only when equity is written in the contract?

Answer: 
There are plenty of benefits to joining a startup without equity.

1. Rapid promotion
2. Experience doing more things and having more responsibility and ability to set direction than you would at a larger shop
3. Exposure to startup people, both in your company and funders, for your next startup

None of these will make you a millionaire, however. If you want to "cash in," then yes, you want equity and you want it in writing. 

I have plenty of friends that worked for one startup or another, and even if they were "there early," when the founders sell and cash out, you don't get a handout out of the goodness of their heart - you get nothing, if you have no clear equity agreement.

So while there are reasons to work for a startup even if you don't get equity, if you are specifically looking for the cash-out part of that life, then you absolutely need a formal equity agreement - though even then, I've seen buyouts that manage to somehow screw minority equity holders, so it's no ironclad guarantee. As a deleted user mentions in his answer here, making sure you have a percentage or otherwise legally-enforceable non-dilutable claim is the only way to ensure you win.
> 
> Shouldn't "reaping the rewards" include seeing your equity/shares
>  become much more valuable? If so, should one join a start-up only when
>  equity is written in the contract?
> 
> 
> 

If your only goal is reaping rewards, then you probably should avoid startups - without regard to the equity being offered. I worked at a several startups, most of which never paid significant financial rewards. If you are talented, you may be able to accrue far more predictable rewards at a larger company.

That said, I would never trade my years at startups for big-company jobs. I was able to learn things far more rapidly, to advance very quickly, to work with extremely smart people, and to feel that my efforts made a difference - far more often than I ever did in larger corporations.

At startups my years, my contacts, my learnings, my professional network - all of these were valuable to me in ways that never happened at big companies. At several startups I got to do things I never imagined I would have a chance to try, and I never imagined I was capable of. For me, the hard work at startups never seemed like a burden, and always made the work day fly by.

If you want to work at a startup, everything else being equal, then an equity position can give you a possibility of a bigger reward. But remember, it's only a possibility. Startups are often shooting stars - burning brightly but often very briefly. There's no guarantee you will be in for a significant reward (if any).