This doesn't necessarily follow. A "line worker"'s downside risk is the opportunity cost they pay for working at a startup, which has a different distribution than the investor's downside risk (the whole investment). At the extreme end I'd argue that e.g. WeWork's investors came out of it worse than the employees.
That's because the less money you have, the more valuable a dollar is.
this is a fairly bad expected value: 10% * 7 * wages - 90% * wages/2 = 25% * wages
So you expect to lose 75% of your wages! Nobody is gonna agree to do that!
A more realistic scenario is 10% * 100 * wages - 90% * wages/2 = 955% * wages
0.5 * 90% + 7 * 10% = 1.15 average.
0.1 * 6 - 0.5 * 0.9 = 0.15.
That is, a 10% chance of a 6 fold gain, and a 90% chance of a 50% loss (-50% gain), gives an expected value of a 15% gain.
Your math is correct also, and has 1 represent no change to your wages instead.
The gain is a one time amount
Wages are recurring income. So when wages fall by 50% you need to value an annuity with half the cashflows as before. The PV of your wage income stream over some time horizon can then be compared with the one time gain.
Otherwise you are comparing a stock concept (wealth) with a flow concept (income)
You can only make so much money from startups by gatekeeping how other people's money is invested. That skill does not an operator make. VCs with operating experience I think operate with a different toolset and underwriting criterion than lifers.