But there is nothing theoretical about start up equity in companies that have raised money. They have a very clear valuation, and especially Series D, that valuation will already be pretty mature.
AirBNB did a Series D with a valuation at 10.5 billion in 2014. They are currently around 91.66 billion market cap. That is a nice 900% return, but that's not a completely different ballpark than other LargeCo's (Apple had about 800% return, Amazon 700%, Meta 500%) - the question is, do you really think your Series D start up is going to be as successful as AirBNB (which is among the top 100 biggest American companies by market cap).
The point is, there is really nothing "theoretical" about the value of those start up shares - they have a well determined value, and for many start ups, even the appreciation of those shares between Series D and IPO can be less than the appreciation they would have gotten from LargeCo shares with top of market compensation and potentially even bigger dollar value equity stakes.
Obviously my experience is my own, but the the net value of my stock was $0 from my three startups (2 acquired and 1 is a lifestyle business for the founder).
I was VP Eng at the last one and did receive a 6 figure bonus (everyone got at least 5 figures, minimum of $20k) and everyone also got new offers with the acquiring public company that included ~20% raises and RSU grants.
For me, all of that combined was equal to my first year at a FAANG, even before accounting for stock increases.
I'm now back as VP at a different startup, though one that's got a much better product and actual customers. It was a 65% pay cut (I view options as a lottery ticket).
For me, startups are more about the experience, than about the money. When a C level exec made a comment about some people not working as hard as themselves (they're a 24/7 kind of person), I pointed out that a) we pay decently well at about 75th percentile but b) the 0.025% or less equity those people have will possibly be enough after taxes to buy a vehicle, even in some wild multi-billion dollar exit scenario. Multiple years of slaving at a (real or virtual) office isn't worth that.
But there is nothing theoretical about start up equity in companies that have raised money. They have a very clear valuation, and especially Series D, that valuation will already be pretty mature.
AirBNB did a Series D with a valuation at 10.5 billion in 2014. They are currently around 91.66 billion market cap. That is a nice 900% return, but that's not a completely different ballpark than other LargeCo's (Apple had about 800% return, Amazon 700%, Meta 500%) - the question is, do you really think your Series D start up is going to be as successful as AirBNB (which is among the top 100 biggest American companies by market cap).
The point is, there is really nothing "theoretical" about the value of those start up shares - they have a well determined value, and for many start ups, even the appreciation of those shares between Series D and IPO can be less than the appreciation they would have gotten from LargeCo shares with top of market compensation and potentially even bigger dollar value equity stakes.