Perhaps, but most Series C equity is already paper money for employees. Companies are going to Series D/E/F rounds with regularity - and you may be looking at 5+ years to liquidity. A company that is getting tepid investor interest likely won't see a major upswing in valuation for their next round.
Consider that as you join a company working on its next round, you may have a 50% chance of major company restructuring which can range from the project you were promised vanishing, to you being laid off. A 15% chance that you get a free doubling of your equity comp on the next 409A valuation (which may be insignificant, have a 90 day exercise window, or other hijinks). While having a 35% chance that nothing major happens.
Unlike an investment portfolio, I have a finite productive lifespan where I can do good work and receive a good payoff for it. Getting stuck at a company going nowhere, or worse getting laid off from one is not a good way to spend that time.
Fair points, I'm just saying if you can trust the founders (e.g. you knew them before they started the current company) then it's in your best interest to join before the next round.
If you're joining as employee 400 and don't know the founders, then yes, joining before the round is risky.
Consider that as you join a company working on its next round, you may have a 50% chance of major company restructuring which can range from the project you were promised vanishing, to you being laid off. A 15% chance that you get a free doubling of your equity comp on the next 409A valuation (which may be insignificant, have a 90 day exercise window, or other hijinks). While having a 35% chance that nothing major happens.
Unlike an investment portfolio, I have a finite productive lifespan where I can do good work and receive a good payoff for it. Getting stuck at a company going nowhere, or worse getting laid off from one is not a good way to spend that time.