[dorkitude]

Until you're profitable (i.e. while you're still dependent on venture funding), my thinking is that equity is cash: the two are convertible quantities, with the conversion rate being based on our company's likely next valuation or cap.

If, as a founder, you give up so much equity that your option pool is totally depleted at the next funding round, then 10-20% will need to go to an option pool top-of -- and there's that much less equity to sell to the new investors, meaning less cash can flow into the coffers. Spending equity costs the company cash.

Meanwhile, if you spend double the cash of another startup in the same stage, your runway depletes doubly fast, and you need to raise sooner. Spending cash costs the company equity.