[emmett]

Of course early stage startups aren't judged by business fundamentals.

Your argument is fully general against valuing equity in any early stage business ever at any price. It equally says that the investors are "gambling" and the founders are "gambling", as much as anything about employees.

Yes, everyone who is being paid in equity is taking a risk. It is possible to attempt to assess that risk. The key to being an early employee is bringing an investor mindset to the table: do I think this company is going to be successful or not?