Earlier quoted context omitted.
This is not a huge flag. When a company starts up, it's difficult for them to get the money operating as per regular. He got paid - that's what matters. The paystub is a minor thing/
Startup or not, you don't offload the risks of making payroll onto your employees.
What are you talking about?
Invoicing your startup for a payment is perfectly normal, and has nothing to do with 'offloading the risks of making payroll'.
Again - getting paid without a pay stub is utterly irrelevant to a new startup.
What matters is getting paid and hopefully it's done in an above the board manner, but the transfer of money is the primary indicator of risk - not the pay stub.
There is absolutely nothing wrong with not using payroll services for the first little while while a startup gets going, and it has nothing to do with the ability of an entity to pay you.
If you are getting paid consistently - through invoicing or whatever means, this is a good signal.
By the way - although the story is pretty scary (and hilarious) - the author is also a little bit naive. Everyone involved seems to be a little inexperienced.
The contract you sign is only as valid as the parties backing it up! Just because someone gives you a 'piece of paper' that may be legally binding, does not mean it has any integrity. The author should have done a basic bit of homework or point blank asked some very basic questions about funding status. He joined a company 'assuming' there was a round of funding, but that turned out to not be true. From my reading of the article, it doesn't seem as though the founder lied, but rather mislead the author. A few simple questions such as: "who has backed you, for how much" - or even a check on Crunchbase would have sufficed.
Again - a contract is only has the amount of real integrity as the people signing it. Your ability to enforce it is not just a matter of law - it's a matter of the reality of the entities ability to do so.
Anyhow, I'm glad it was written up so that people can learn form it.