[ryan_j_naughton]

It is definitely better for the employee. But it also doesn't necessarily align incentives.

For example, once you are fully vested at a startup, the reason to stay is primarily if you think you have a material impact on the share price. If you don't, then you should leave to go somewhere where you do have a material impact and treat your shares in the original startup simply as an investment. In contrast, if you have a material impact, you should stay to maximize the value of your shares. Pooling everyone's shares, while better for the individual employee from a diversification perspective, reduces the ability of the employee to have a material impact on their investment.

[dsr_]

Consider that the overwhelming majority of startups don't make a positive exit/acquisition/IPO... but in a group as large as YCW19, some of them will. (That being the entire purpose of YC.)

Assume your prospective employees are economically rational. They have a couple of offers on the table, identical as to salary, benefits, and track record of existing founders. The only difference is that one is offering a tiny percentage of a lottery ticket that will pay out if they exit successfully, and the other is offering a tinier percentage of a lottery ticket that will pay out if any of their sister companies exits successfully. And there's little chance that you picked a unicorn, but a pretty good chance that somewhere in the cohort is a unicorn.

Being in that cohort becomes a hiring advantage if you get to share in their success.