I landed a job in a reputed tier1 semi-vendor out of college. I worked there for about 8 years. Work was (technically) fantastic, pay was very good. But I had scratch the itch..
Left the company to join a startup (at that time, 2 yrs in operation). Took 50% paycut, but my wife stopped working at the same time, so effectively 75% paycut. My plan was to work for approx 3 yrs and see what I'd like to do next. Nearly 10 yrs down, I'm still here. My pay is still about 60% of what I'll get if I quit today and join elsewhere (I'm reasonably confident of that statement). My cumulative loss in monies over 10 years, taking into account growth due to investment as well, comes to nearly 7 times my annual salary.
So yes - not a financially wise decision. In retrospect (even though I didn't think of it that way earlier), it is a very selfish decision - missed family vacations, higher financial stress, budget stays, ... all to scratch the itch.
I have mentally written off the amount. I'll never get it back.
I'm still here due to few reasons: a. My salary even though much lower than what I can get, is still "sufficient" for most purposes b. I get to jump into very interesting problems - work on topics I wouldn't have been able to, had I been in a regular corporate environment. c. I have stocks - which potentially can give me back a good return if and when we exit. d. I still believe in the story we are selling. e. I add significant value to the company. My leaving the company will effectively devalue my own stocks. f. I have lots of work-life flexibility.
I'm not going to advice you - it is your decision. But, a. It is very likely that you will never recover that 25% of salary loss b. Your stocks may make it harder to jump ship later. And it is no better than monopoly currency - until the startup exits. Which may take forever - and may never happen (don't listen to what they say). c. You will likely face a much more challenging work environment - including activities that are not core development. Your time with Excel spreadsheets and Powerpoint may increase. I don't mean that as a bad thing!