If you're going to limit the discussion to startups (I did not), then we need to have a different discussion. I imagine all Facebook employees with an employee number less than #1000 are quite happy with their options. As with all things investing related, risk is proportional to reward. So, those 70% that aren't paying off are offsetting the 30% that are paying off massively.

If you don't want to take this risk, choose a different industry. Traditional corporations issue options all the time that pay dividends that consistently net positive value. You may only get a few hundred/thousand per year, but you can depend (somewhat) on the income they generate.

"30% pay out" is not the same as "30% pay out massively"

You misspelled pedantic.

You're pretty optimistic. I was going to guess more like 90% never pay out.

And for a good rest of the other 10%, you'd have been better off investing in something else.

even less than that. if 1 in 10 startups survives the first year and 1 in 100 goes to ipo, stock options are just a trick to underpay engineers.

now, if one really is a 'key player' and a 'cornerstone', then equity is where the game's at.

Or have them taken back if they leave or get fired.