You're probably not as good at evaluating the difference between startups as you think you are.
I've never worked at a startup, so I'm speaking from ignorance. That said, what always struck me as a problem with the work for equity is just that. Investors are professionals (or competent amateurs) at evaluating startups and understanding the deal. They have access to more information and have more leverage in demanding it.
They also do a lot more choosing too. I think this is the one that get lost in an analysis like this. Most startup investors invest in a small portion of the deals that are a signature away and evaluate many more. Employees are much more limited.
Sweat is a lot less liquid than money. The problem of receiving risky stock in exchange for labour is like the problem of trying to trade without money in general. A graphic designer is limited to accountants that need designing and want you. An employee is limited to investing in companies that want to hire them.
I've never worked at a startup, so I'm speaking from ignorance. That said, what always struck me as a problem with the work for equity is just that. Investors are professionals (or competent amateurs) at evaluating startups and understanding the deal. They have access to more information and have more leverage in demanding it.
They also do a lot more choosing too. I think this is the one that get lost in an analysis like this. Most startup investors invest in a small portion of the deals that are a signature away and evaluate many more. Employees are much more limited.
Sweat is a lot less liquid than money. The problem of receiving risky stock in exchange for labour is like the problem of trying to trade without money in general. A graphic designer is limited to accountants that need designing and want you. An employee is limited to investing in companies that want to hire them.