You're right that the cash compensation is often similar. But estimating the value of options is really hard! One of the better (seed) companies I considered working at was able to tell me what my options would be worth given various exit scenarios. In that particular case the company would have had to exit with a $5B valuation in order to match my FAANG compensation. The company was worth $100M at the time. When I pointed this out, the founders reassured me that they were very confident that their company would exceed that valuation :)