It's more than just the waiting though, it's the uncertainty and the fact that you've got this capital tied up in an investment that you could have in another investment (i.e., go work somewhere where you simply get paid instead of get stock).

Using a 10% time-value-of-money discount, your stock options are only worth ~35% of their final monetary value when you first start out in the 10-year payoff case. That's not a 35% chance that you'll make something, that's the discount on what you do make. You still need to factor in the risk that you'll get nothing or a pittance, especially if we're talking early startup where the risk that you get nothing is probably somewhere in the 90% range. You don't have to come up with very unrealistic numbers in the current environment before you're looking at applying a ~95% discount to your hopes on what your stock options might be worth in 10 years.

(IMHO, working at a startup when you're young for some hard & fast experience, if you can afford it, is possibly still worth it, but at this point in 2017, early engineers should be demanding either cash or founder-level equity grants. An in-between grant that may pay out $100,000 in ten years may sound grand from the perspective of someone about to receive that payout, but from the front-end you should value it somewhere around $5K or so, and I wouldn't fight anyone who wants to pick numbers to push that lower. On an annualized basis, $5K is more like "a minimal raise" than a reason to work at a company.)

There’s no reason not to look for quick payouts if you’re fresh out of college and looking to dive into the world of Silicon Valley style startups.

Money today is worth more than money tomorrow, and often the lump sum of money you get at the end of a startup’s liquidity event as an employee is not much greater than someone who earned money through a more traditional route, if you even get it. I know people who chased the startup life for years with nothing to show for it.

A decade later when they finally give up and resign to a more traditional career path, their cohorts who started down that path a decade ago are now impressively far ahead of them in life. I’m talking big houses with long hallways and a baby or two keeping them up at night while they ascend the ranks of a “real” company during the day.

So when playing the startup game, the only thing on your mind should be “fast money, fast money, fast money!”. If you like to see businesses that have been around for way longer than 10 years and building strong revenue that most startups can only dream of, don’t look for startups.

People should keep that in mind when getting into it, but the other part is that some people (myself included) enjoy working for small companies far more than they enjoy working for large companies, so it's not an apples to apples comparison. I generally also prefer not to work with people who have a strictly mercenary mindset.

Given that the Bay area has the highest cost of living in the US, I think 10 years is a lot to wait for payout. In that time you could have got married, had kids, bought a house, had a parent get sick, get divorce, etc. People have real lifestyle changes which make the extra $$ important to them over a 10 year period.

The standard pitch (that many recruiters abuse) was that your options would become real in 4 years but the reality is this is closer to a decade. If companies were marketing their options realistically instead of selling them like snake oil the 10 year point would be fine.

I remember interviewing with an almost unicorn and their VP of engineering literally tried to pitch their options by telling me to assume the company would IPO at XXX price within 4 years. No mention of opportunity costs, tax issues, liquidity issues, etc. He even forget to consider the strike price when "helping" me ballpark the benefit. And everyone seems to forget there is thing called the discount value of cash - $200K in 10 years is not the same as $200K in 5. It's been 2 years since I got that unicorn offer and I can say that the company is at a minimum still 4 years away from an IPO.

Stop selling the snake oil and people wouldn't be unhappy when there is a decade long payout time.

My point is more that people seem to look at going public as the one true sign of enterpreneurial success. I worked at a privately owned start up in which maybe 4 employees held all the equity, and the other 200 were simply salaried or paid hourly, and you know what came up in every Q&A? "When are we going public?" It doesn't seem like many people talk about their vision for their start ups being sustainable, or that many people think about the implications of going public for the business itself. Personally, I would be hesitant to invest much time in becoming a client of a company that was rushing to go public because it needed the cash and private investors weren't cutting it or because most of the company wanted to cash out. It's a red flag to me.

But more to your point, recruiters lie, and if you don't realize that as a grown up, college graduate, you've got bigger problems in your life, I suspect, than when a company decides to file IPO. They shouldn't lie, but recruiters tempting you with options also isn't a reason to suddenly submit to the SEC and public traders to get some cash.

What, no. The problem is that the typical arrangement is that employees must either buy their options (which have been very expensive at Dropbox for past 5 years at least, and thus out of reach and highly risky for most), or forfeit them soon after they leave.

So in practice, employees are shackled to the company until IPO happens.

(Note: some more progressive companies have been combating this dynamic a number of ways -- I don't know if Dropbox is among them)

I don't mean this facetiously, but what is different about Dropbox as a company compared to what it was 7 or 8 years ago? Their primary product seems mostly the same from an end user perspective.

Is that bad? I'm very attracted to that. Dropbox does the thing it always did, but better and more reliably.

No it isn't bad, but the comment I was responding to mentioned that they like to see a company built up over time. I just don't generally know what Dropbox has been building over that span that wasn't present very early on.

> I just don't generally know what Dropbox has been building

Customers.

Which is the exact type of thing that you can speed up with a cash infusion to increase marketing and sales efforts.