My time is valuable and if an employer isn't willing to give equal effort in the interview process, I'm not interested. Also I'm not particularly interested in a workplace – especially a startup – that insists on this in a recruitment process. It leads to only hiring employees who are willing to play the game which is much more likely to exclude people who want to live lives outside of their job and fosters a culture of obsessive overwork as well as not having the diversity of opinion/demeanor/background/etc. which is valuable in a healthy workplace.
If you want to bring me in and spend a day with me talking and working in your office, fine. I won't, however, spend 4-10 hours working on a problem for you while working at the job I already have and doing the rest of life.