I agree with you with the caveat that I think it is important for two things: equity, and expected work.
If I'm a co-founder I am going to work day and night on our problem space, the tech, whatever my role is. I'm going to be thinking about it during dinner. I'm going to wake up early and stay up late and work on it during lunch breaks if I'm still an employee somewhere. I'm willing and expecting to work for $0 cash comp for months or years, or until we get investment. I'm also going to expect an equal share of equity to my other co-founders, and expect them to work more-or-less a "fair" amount when you compare our different equity stakes. I also expect to know what their equity stake is. Ballpark I would look for a floor of 25% equity before pulling out a pool for early employees.
If I'm an early employee, I will probably work more than 40 but I'm certainly not working 80-90. When I'm not working, I'm not working. You're probably not getting my cell phone number. You're going to have to pay me something, and the first time a check bounces or a direct deposit is missed I'm gone. But I'm also going to be happy with a lot less equity than 25%.
I'm willing and expecting to work for $0 cash comp
That's illegal in a C-corp, the common form of startups (in the Silicon Valley sense of "startup"). Everyone is an employee and is required to be paid the minimum wage established by law. And somewhat ironically, the liabilities created by working for zero compensation are a reason for investors to forgo investing particularly since it correlates with lack of profitability.
This is just not true. You can absolutely own part of a business that isn't a C-Corp. I've purchased various percentages of LLCs and S-Corps (and LLCs taxed as S-Corps) and not once have any of my attorneys, accountants, or the IRS come to the conclusion that the equity "doesn't mean anything much."
> Without being a C-corp there’s nothing in which to have equity or rather “equity” doesn’t mean anything much.
Completely unwarranted rudeness notwithstanding, this comment is still 100% false.
You brought up C-corps, and legal/accounting structure isn't mentioned in any of the parent comments. Which is fair, but like I said nobody first starts a business by filing paperwork to incorporate a C-corp. They work as an LLC or sole proprietorship, and if/when they reach a point where it makes sense, they restructure. I even alluded to that in my sentence you took issue with, "or until we get investment." Yes, you'll absolutely restructure as a (Delaware) C-corp if you take venture investment, and this minimum wage law would apply - but not to the co-founders, as @adventured noted.
If I'm a co-founder I am going to work day and night on our problem space, the tech, whatever my role is. I'm going to be thinking about it during dinner. I'm going to wake up early and stay up late and work on it during lunch breaks if I'm still an employee somewhere. I'm willing and expecting to work for $0 cash comp for months or years, or until we get investment. I'm also going to expect an equal share of equity to my other co-founders, and expect them to work more-or-less a "fair" amount when you compare our different equity stakes. I also expect to know what their equity stake is. Ballpark I would look for a floor of 25% equity before pulling out a pool for early employees.
If I'm an early employee, I will probably work more than 40 but I'm certainly not working 80-90. When I'm not working, I'm not working. You're probably not getting my cell phone number. You're going to have to pay me something, and the first time a check bounces or a direct deposit is missed I'm gone. But I'm also going to be happy with a lot less equity than 25%.