Stories like this are extremely common nowadays. Startups are going to have to come up with some other way to attract talented workers, as most people know that equity is a joke, the hours are extremely long, and the pay is crap.
During the dotcom bubble I knew that VCs were kicking themselves every time some 'secretary becomes a millionaire' story came out because this meant they left money in other people's pockets. Over the last 20 years investors have refined their game and this never happens now, indeed, it's the opposite.
I think the only reason to go in other than as a founder in a startup is as someone right out of school for experience. Otherwise they have to be treated like any position, on a straight cash comp/benefits basis, ignoring the likely worthless equity scrip. In my experience, the best play is to go in on a contract basis once a startup is in the "burn baby burn" phase and you can bill market rate for all of those hours.
I'd say total compensation has worked out roughly the same.
It's a little hard to compare since I've sometimes worked remotely, and with companies headquartered in Silicon Valley, Cambridge (MA), and in less techy regions.
The non-startups were actually located outside of Silicon Valley and Cambridge. If I adjust for the different regions' cost of living, the (salary+benefits) dollar value were about the same across the board.
One caveat: The non-startups in SV and Cambridge gave me stock grants that vested over a number of years. If I'd stayed long enough for them to vest, the total compensation for those non-startups would have been about $7k-10k/year higher (pre-tax) that the compensation I got from startups.
