Employee compensation from startups depends on many factors including how much they value employees, but it's really important for prospective startup employees to understand that you'll probably work longer hours, have more responsibility, and earn less than if you keep your day job.
Someone with experience in a great "normal" job may be surprised that the compensation, including equity, of a first employee is usually significantly less than what they're already earning. A first employee is taking a risk in opportunity cost by accepting a lower salary, but the risk should have an associated reward, namely equity. However, if a company has to do well just for the employee to break even with the opportunity cost, joining a startup doesn't seem like a sound choice. And not just in terms of money, but also general wealth and quality of life.
Further, the hours conserved by remaining at the day job can be used to build your own product. When the risk-level is acceptable, leave the day job for your own startup where you can maintain control and keep a meaningful equity percentage.
There are benefits to being a startup employee, such as the exposure to growing a company and the opportunity to join a support network and work with good people. Those things have value, but not always enough to offset the opportunity cost of either keeping the day job or founding your own startup.
Personally, I'd still consider joining a startup as an employee if it was a great match.
As a side note, RethinkDB has done a great job with posting a mapping of position/experience to compensation. They set compensation expectations before a prospective employee has even applied.
Someone with experience in a great "normal" job may be surprised that the compensation, including equity, of a first employee is usually significantly less than what they're already earning. A first employee is taking a risk in opportunity cost by accepting a lower salary, but the risk should have an associated reward, namely equity. However, if a company has to do well just for the employee to break even with the opportunity cost, joining a startup doesn't seem like a sound choice. And not just in terms of money, but also general wealth and quality of life.
Further, the hours conserved by remaining at the day job can be used to build your own product. When the risk-level is acceptable, leave the day job for your own startup where you can maintain control and keep a meaningful equity percentage.
There are benefits to being a startup employee, such as the exposure to growing a company and the opportunity to join a support network and work with good people. Those things have value, but not always enough to offset the opportunity cost of either keeping the day job or founding your own startup.
Personally, I'd still consider joining a startup as an employee if it was a great match.
As a side note, RethinkDB has done a great job with posting a mapping of position/experience to compensation. They set compensation expectations before a prospective employee has even applied.