I've been offered a stake at a privately funded startup for a lower salary and that's reasonable and realistic. Had they offered me options instead I would have walked away sooner than I did. Trading salary for a stake is a gamble, but doing the same for options is like a quadruple mortgage.
The problem with giving outright shares compared to options is you owe taxes on that. In the taxman view you got something (shares valued via 409A) on which you have to pay taxes even if the shares you got are not liquid.