[vladimirralev]

What do you mean by founders bear most of the risk and responsibility? Most founders are not personally liable and haven't put significant amount of their own money in the company. At most they get some rough talk from the investors/customers, just like an under-performing employee would. They just stand to lose some of their time that could have been spent in more profitable employment.

[curun1r]

> They just stand to lose some of their time that could have been spent in more profitable employment.

That's exactly what employees have to lose too. The way that I've always looked at it is that any employee, founder or not, should be entitled to current-valuation equity that's equal to the difference between their market rate and what they get paid by the startup.

Founders are frequently unpaid or poorly-paid at a time when the valuation is near zero, so they end up with a ton of equity. Early-stage employees should get considerable equity, since they're likely taking salaries well below market and the valuation is still tiny. Late-stage employees likely won't get much equity because they're not taking much below market and the equity is already worth a considerable amount.

[throwaway7808]

> should be entitled to current-valuation equity that's equal to the difference between their market rate and what they get paid by the startup

Rrright. Only a founder can decide to dilute the stock while keeping that quiet, or do any number of other things. While an employee is on the receiving end.