So, if you were an early stage Google or Apple employee you would take salary over stock?
Equity is very similar to the lottery... a few will win hugely large while the masses will mostly receive nothing. Thats how the system works. Ive taken equity and cash at different times over the years. Its not a scientific breakdown but through experimentation the decision to take cash over equity has been reinforced over and over again. Additionally despite my one very fortunate friend, everyone else I know in the industry is far from struggling financially but generally agrees from their experiences that equity is very much just a lottery ticket. (And even if your company does end up being 'the one', you still risk getting screwed out of your shares.) I'd rather have cash.
Or, do you believe it is impossible to know, or at least approximate odds of, any company's chance of success?
Let me put it to you yet another way. Which is more likely to go out of business in the next two years, blockbuster or BP? If you say blockbuster, why?
So now in regard to gaging the success of your company and your investment... I think it pretty easy to forecast the coming trends in the technology space. For example I think its pretty easy to foresee that the internet is going to eventually eat traditional cable providers as its great at eliminating the middleman. There are going to be some big winners in this space and there are lots of early stage companies looking to ride this. But who out of them is going to be the big winner or few winners of this space? - your guess is as good as mine. As an employee I have to pick one but as a VC or investor I can invest in the general space knowing that somebody in my portfolio is probably going to win this market.
This is the reason I take cash - its not that I don't want to invest in equities, its that I want to have the freedom to put that cash into diversified equities.
If I were go back and look for an equity heavy gig, and I don't plan to, I would look at the entire process as an early stage investor. No, I can't invest in 10 or 20 different companies, but I can be selective and increase my odds. Actually, anyone with my current skillset could walk into any startup in the valley and start working the next day. That is something few, if any, angels could do.