If you're receiving a W-2 salary that's in the ballpark for your field, absent some other contribution (marketability of your name, unique and non-substitutable skills or rolodex) you're not a cofounder.
I agree... no-one wants to be the first employee, instead push for last co-founder.
It is an interesting insight to what some startups get away with though - a way below average salary and a tiny speck of equity.
She must truly believe the company will sell for hundreds of millions of dollars (unlikely) in order to see a decent return.
It feels like her role is an auxiliary function, like Office Manager or QA, so I think her generic analysis works. If her role was central to the business, then I don't think she would be valuing her contribution with a one-liner like 'Employee’s value-add to the company (I used 15%, which I think is pretty low!)'. Instead the question of her value-add would be the starting/central point of the negotiation.
If she thinks that she's increasing the odds of a successful exit, then below market compensation could be financially worthwhile for that reason alone.
Keen also has <$1M in investment. My salary isn't quite market-rate for an engineer, but it's not too far off when you include perks (proximate living bonus, lunches, healthcare, etc). If we do raise series A (or become profitable quickly), we plan to adjust salaries toward market rate.