No thank you. I'm not 19 anymore. I'll take the high paying job, and dump the rest into Vanguard funds. Guarantee I'll make more money off of the majority of nonsense stock options.
Lottery tickets have a predictable value. Lottery tickets and cash are basically interchangeable goods, and if you have the ability to bear the risk that any given lottery ticket might not pay out then you can make money by taking on that risk. It's not really any different than being a VC, an insurance company, a movie producer, etc.
It’s not cash, and has questionable value. Equity is no replacement for cash compensation, and it’s exhausting to watch people explain it away as equal to cash comp.
Options have an expected value (EV) that isn't too hard to calculate approximately. They also have a relatively high variance. But it's trivially easy to prove they're not worthless, even if some become so when the company fails. I've personally had one "hit" and a few misses.
Whether to accept options instead of salary is an individual choice that depends entirely on their risk profile and the terms...how much salary are you forgoing, how much equity are you getting, how likely do you believe a liquidity event is.
If you could sit at a roulette table that paid 40-1 when you hit a number, would you play? That's a +EV bet despite the fact that 32/33 times that bet will lose. If you had infinite funds and infinite bets, you'd be a fool not to play. But if you're betting you last dollar, you're probably going hungry that night since you'll be losing 32 times as often as you win. And that same bet at the traditional 32-1 is a loser no matter how much money you have. The terms of the bet and the individual's circumstances dictate whether to play.
Options are the same, you just need to be familiar enough with the whole situation to judge the terms you're getting. Many startups are very good at selling the upside and underselling the risk, so people give away salary at -EV terms. But that doesn't mean that equity is worthless.
Again, much like being an insurance provider, that's how you make money off it. When I do consulting I generally aim to capture about 10% of the value I'm creating per hour in cash, leaving the client with the other 90%. (E.g. billing $200 per hour if you're creating 2,000 per hour in value or whatever.) This is basically an equal exchange because one party is getting the cash, and the other party is getting the risk, along with the potential benefit that taking on that risk entails.
The fact that different people have different economic needs and utility functions allows everyone to benefit. That's why I'm saying that if you need less cash because you don't have a family, that represents optionality, and that optionality can be used to make more money than you'd otherwise be able to make.
