So by employee #50, you have about %50+ of the company tied under employee stock options alone. So either you inflate away everyone else's original equity significantly to pay for new employees or you soon run out of equity.

The reason why the equity slices are low from what I understand is in the end of a VC funded company the numbers are something like %70 investors, %15 founders and %15 employees. If your a unicorn performer like facebook, it's more %40 investors, %30 employees and %30 founders.

But you'll notice the pattern that all employees combined get the same equity as founders.

Also profit sharing is hard to do with the red ocean strategy of VC companies that give equity in the first place. When the company is around for 3-5 years concentrating on getting hundreds of millions of users first before collecting cash, profit sharing is going to be $0. Profit sharing is only something enterprise or product companies can do initially, and it cuts out the new search engine, the new social/messaging network and other long lead time companies that eventually dominate the software world. WhatsApp was purchased for billions because in a couple of years, it could of easily become the world's next Facebook at their growth rates. With under 40 engineers...

So to make the numbers work, angel list is going to be giving %0.25-%0.50 of the company to initial employees.