Startup founders in SF: why should first employee join you?
Context: I am a multiple startup founder (non-SF) coming from engineering + picked up business&management, have a decent cashflow from an organic (non-startup) tech business that I've built myself, moved to SF, worked as VP of engineering for a startup for the past 2 years, left the corp a few months ago. On the learn...earn scale, I'm heavily on earn, agnostic on the financial instruments, but the current setup makes absolutely no sense to me.
Startup math from where I stand: first employee equity comp: 1-5% ,which gets diluted to, at most, .5% at exit; with apriori probability <1% exiting $100M in 8-10 years. Even if I'm 100% convinced it will exit, yearly comp on this is ~$50K. I'm not, and a probabilistic scenario-analysis paints a non-working picture even to the rosiest of Pascal's mugging. VC very explicitely invests into strategies that has low-probability home-runs (and actively drive the corps towards these strategies). Running with 5% success rate at $1B exit yields $25K yearly comp.
Taking a long-term view, "freedom/ownership" generally goes way down as companies matures; and gets replaced by either sales-driven, or market/conversion-funnel-driven metrics. Over the period of 8-10 years, this is also not a good answer. For professionals with long experience, titles also don't mean much (esp not in new startups). Please don't write "passion".
Salary math: Housing prices increase 10% yoy (because this is SF). Good rule of thumb is for total post-tax comp to be 3x rent. This means that regardless how below of my means I'm living, any year in which I don't get a 10% increase on my topline revenue is a year in which rent bites into my buffer. Startup salary re-negotiation is also probabilistic. This is a game with only downside.
Given the above, why should a seasoned veteran engineer join your startup?
I'm looking at this from all sides of the table -entrepreneur, potential employee, and hiring engineers at previous place- and the lack of working math here geniunely perplexes me. Looking for genuine answers from entrepreneurs: why should seasoned high-caliber people join your startup as a first employee?