Earlier quoted context omitted.
Wrong. There's a big difference between taking $20-50K less per year in salary and chugging away for years with little or no pay. Whether you're full-time as an entrepreneur trying to make a startup or slaving away in your free time, when you could be out partying, there's an inherent risk in time and money that is not the same as a simple pay cut.
In my opinion founders chug away for years with little or no pay because they love it. If someone think of it as a sacrifice towards achieving billions then they should be doing something else. You have to enjoy the process. Quantifying your sacrifices in "Fun" is harder than calculating your financial risks and I think equity should be based on that. Partying all the time is not a bad idea if you love it.
I feel the best way to split equity is to make the standard salary "swappable" with equity. let me give an example:
say 1 founder, 1 early employee. At the start, there is $100k in the bank that the founder put in (or otherwise managed to get). Founder has 100% equity, so each 1% equity is "worth" $1000;
first year, lets say the employee worked and produced $100k worth of value. Lets further say the normal rate is $100k for that employee. So the company has $200k worth of value, even tho there is only $100k in the bank. The employee could take 0% equity, and $100k in money. Or, 50% equity, and $0 money (and all scale variation in between).