There is another important bit here, which is to think of it in terms of individuals rather than startups.
The companies that get big (FB, Twitter, Google) hired hundreds or thousands of people before IPO'ing. AirBnB, Dropbox, Uber, and others in their weight class must employ at least 100-300 people.
By contrast the companies that fail tend to fail small.
So rather than saying "1.4% of startups make it to IPO", what if we looked at it by individual? That is, if you are being hired, it's more likely that you are being hired at a company that is likely to be successful (as they are able to pay your salary/hire you).
I'm not sure what the answer is and you'd need to do the math here. But my overall intuition is that a skilled engineer who did say 3-4 startups between 21 and 35 has a pretty good chance of getting a decent payday (say $500k-$1m+), while having a lot of fun. Of course, if you just want to optimize money you should just save and not spend. Alternatively you can go to Wall Street, but (a) that's not what it used to be, (b) it's not fun, (c) many of the people there are leaving for here and (d) it won't even remain what it is for long if the market takes a serious downswing.
And you're of course right, the interesting question is not what an options grant in the average startup is worth, it's what an average options grant is worth.
Or phrased slightly differently (to make it obvious this is the relevant question): "What is the expected value of the options grant I have been offered?"
On the other hand, all but the first few of those hundreds or thousands of employees will get rather smaller option allocations than this article is assuming, which may well cancel out any increase in their expected income.
The companies that get big (FB, Twitter, Google) hired hundreds or thousands of people before IPO'ing. AirBnB, Dropbox, Uber, and others in their weight class must employ at least 100-300 people.
By contrast the companies that fail tend to fail small.
So rather than saying "1.4% of startups make it to IPO", what if we looked at it by individual? That is, if you are being hired, it's more likely that you are being hired at a company that is likely to be successful (as they are able to pay your salary/hire you).
I'm not sure what the answer is and you'd need to do the math here. But my overall intuition is that a skilled engineer who did say 3-4 startups between 21 and 35 has a pretty good chance of getting a decent payday (say $500k-$1m+), while having a lot of fun. Of course, if you just want to optimize money you should just save and not spend. Alternatively you can go to Wall Street, but (a) that's not what it used to be, (b) it's not fun, (c) many of the people there are leaving for here and (d) it won't even remain what it is for long if the market takes a serious downswing.