I&#x27;m not well-versed enough in investment to reply to your comment on purely financial grounds, but I still see a problem -- how often are those steps actually taken in practice? How would it even be possible for an employee to know that the founders have taken (and will continue to take) responsible steps with their funding rounds?<p>Part of the issue at question is whether it&#x27;s worth it for employees to bet on founders having done (and continuing to do) the right things with regards to investment. So when assessing the risk&#x2F;reward of equity over cash, an employee now has to not only examine the marketability of a company&#x27;s product and sales, but also whether they can trust the founders, board, or whoever to be responsible with equity dilution and valuations.<p>Given the huge variety of unknowns (and <i>very</i> high risk of dilution or lack of a liquidity event), as a non-startup-employed observer I have to say I&#x27;m very confused as to why startup employees take effective pay cuts for stocks.