There's a huge underclass of shoestring startups, most of which you'll never hear of, paying $2-5k per month, with some zero-interest deferred-cash arrangement and equity that is impossible to valuate. They run on some small amount of angel funding (often month-to-month) but never get to the point where they have enough product to get an A round.

These second-circle startups occasionally hit the first circle (great product, fortunate connection) and can get funded, but the odds aren't great, and you should never work for one as an employee.

I worked for one, at one point. I took the CEO at face value on his level of connectedness, so I believed that funding (and full salary) was "just around the corner". What he didn't tell me (and what took some research on my part, that I should have done sooner) was that most of his bridges were burned and that a lot of his connections were irrelevant to tech startups.