" If the founder gives away 10% more than they should to the first 10 employees, then that's 10% less that's available for fundraising and future equity grants -- and that might break the company."
This is not how stocks work. Exceptions aside, every previous round gets diluted by the next round where the 10% eventually becomes 1%. Also, not every employee will stay on for 4 years to vest their stock options completely.
You do have the risk to burn through your allocated employee stock option pool if you're too generous (this is the point after which the investors and founders start to dilute their shares).
This is not how stocks work. Exceptions aside, every previous round gets diluted by the next round where the 10% eventually becomes 1%. Also, not every employee will stay on for 4 years to vest their stock options completely.
You do have the risk to burn through your allocated employee stock option pool if you're too generous (this is the point after which the investors and founders start to dilute their shares).