If the equity is important, then it should have some chance of producing fuck-you-money at liquidation. 0.05% is only fuck-you-money if there's a Google IPO size liquidation and there's been no dilution ($11,500,000 @ $23billion). That ain't significantly more likely to happen to a software developer than a chef.
That seems highly optimistic.
This seems to be a common pattern in finance, where one party tries to shed all their risk cheaply.
They're fine with us all having worthless stock together.
What I am getting at is that taking equity means getting a lawyer to oversee the business terms. Going into business with someone who doesn't value the long term success of those with whom they are in business is a bad idea in my opinion. It's better to hang out with people I trust.
This can turn out to be worth more than either the stock or your salary but that's a long game and one with even less guarantees.
Still, I'm pretty sure that very few people that were on board with one of the bigger SV successes of the last 2 decades are going to complain about their pay-day, whereas for everybody whose company did not make it it hardly matters how much stock they got. And that's really where these founders miss the boat: they should be happy to share a sizable chunk of what is essentially worth nothing. They are essentially already busy with their exits when they should be building a company and that alone is a good reason to avoid those companies.
Shares that signify that the owners want a person to help run the company are different than shares as a form of payment. There's nothing wrong with either so long as everyone understands which it is. If it's compensation, then it's mostly a distraction from evaluating the job offer. The ringside seat to a rocket-ship ride comes with or without shares.
Is the deal so good to a first approximation
that paying a lawyer to review it is clearly
a no-brainer?Absolutely false. I hear VPs all the time speak about trying to "close a candidate" during negotiations, like a car sale. If you are a tough negotiator you will only earn their respect.
Not negotiating just makes you look like you don't understand business and shouldn't be trusted with any business decisions.
People that are insecure about what they bring to the table.
Pre series-A the risks are still huge and the stock should be priced accordingly. Say the founders think a pre series-A company is worth $2M and they offer 0.05% equity you could enter negotiations asking for 1% more if you feel like it (and walk away if it goes below 75% of your counter opening bid) if you can defend the position that there is still a 95% chance that the company won't make it unless they have you on board.
Otherwise price the stock at 0 and ask for a market conform salary.
They'll move. An offer is just an opening move, nothing more.