I'd agree that in tech in general you have to be very very careful in terms of understanding what you are really stepping into. There are jobs that are great but there are more jobs that are not so great (meaning the pay may be good but... 60-80 hours, boring CRUD stuff, unmaintained code bases, tyrannical managers, etc. etc.) This is probably true with most occupations but my guess is that it is a lot more extreme for software engineers (especially in SV). I've specifically taken somewhat significant lower offers based on my intuition about a job being "good" or not - I'd highly recommend it (I used to jump around for just higher salaries and to no surprise ended up miserable)
This is something I stress when I talk to other management-types about hiring, now that I've (mostly) joined the Dark Side.
If you want amazing people, just spending more money on salaries isn't going to do it. I too have turned down very high-paying offers because they came with the baggage of a company that considered Dilbert strips inspirational rather than satirical.
This is an area where small start-ups can really win big, by offering what bigger and better-funded players don't:
1. Sensible hours. Sure, crunch times happen, but being in crunch mode all of the time is a sign of management failure.
2. Accountability defines authority. There's nothing worse than a company where you're responsible for keeping other peoples' (often impossible) promises.
3. Big equity with profit-sharing. This really keeps everybody's goals aligned: the employees win if the company either gets a big exit or becomes a profit-making machine.
The three of these together are easily worth more than $30k in competitive salary.
I once interviewed with a company that had built in "crunch mode" into their release schedule. I told them that I regarded relying on "crunch mode" as a strategy smelled of management failure & if they couldn't get product out the door without it then they had a problem. Needless to say the interview went downhill from there.
Every programmer recognises there might be times when something has gone horribly wrong, or there's an immovable deadline that has to be met. Actually planning to put your team through that amount of stress on a regular basis for no particular reason other than some arbitrary "deadline"? Well, some people were obviously happy to sign up to wear a "kick me" sign on their backs, but it wasn't going to be me.
(Yeah, I know all the arguments about startups / success / equity / return on time invested etc etc. Lets just say that they didn't apply in this case.)
That's a good question, and depends on a lot of factors.
I'm going to assume we're talking about employee equity, and not founder equity. If you signed on at a reasonable salary, then you're an employee. If, on the other hand, you worked without pay until the company got to the point where a salary was possible, then you're a co-founder.
For a first employee, somewhere between one and five percent makes sense to me. Exactly where the number falls depends on their role, as well as small details like company funding structure, cashflow at time-of-hire, etc.
The next two to five or so employees would be somewhere around one percent.
After that, the number starts diving rapidly, with a total employee ownership converging to a number near ten percent or so.
In my experience, this is more than a lot of startups offer, and feels fair in terms of risk.
On top of the equity, though, I think that profit-sharing is also important. Not as a mechanism for motivation, but as a means of retaining talent. Exits are few and far between, and it's quite easy to screw over minor shareholders. An annual bonus check based on company performance goes a long way towards showing personnel that you're serious about the idea of "if the company succeeds, you succeed".
At the end of the day, no matter how much equity gets passed around, it's unlikely to pay out big unless your company goes public.
Too many companies attach conditions to their equity and too many acquiring investors and big companies will readily dilute employee shares to sweeten the equity deals for founders and early investors.
Thats why sweating hard times out for equity is a hard sell to engineers these days. There's too many ways for equity to be worthless paper later on and there's countless examples of it happening recently (e.g. Skype, Zynga, etc).
Hence the profit-sharing. If the company never gets, or was even aiming for, a big exit, but instead turns into a long-term sustainable business, then as an employee you still get a cut of the success you helped create.
