Employee gets fired and founder may get something or nothing but get “fired” last and turn off the lights on the way out I would guess.

If startup goes to zero, then everyone goes home with nothing. The founders typically don't lose any money of their own -- that cost is shouldered by angel and series-A investors.

Often though, the startup has a "soft landing" where it's acquihired by a larger company, and then the founders typically get executive or very senior roles (with large bonuses, etc) meanwhile the non-founders get standard employee packages.

Yes, I'm glad I'm not the only one who thinks the economics of it are a little bit broken. I will never join another start up as employee #1. I'd much rather come into a larger start up with a high cash comp + equity, than very low cash comp, worked to the bone.

The other thing no one talks about is founders tend not to dilute themselves, but often early employees are diluted heavily.

Someone once told there's only two times to join a startup: as a founder, or the year before they go public.