The comment on "founders getting offended when asked about the preferred overhang" is a point I think that is getting missed. Yes, there is the whole "caveat emptor" of being an equity employee, but there is clearly a culture of hiding all of the necessary information for making an informed decision.

In a lot of ways, I think the over-emphasis on "startups change the world" has been a contribution to this. There is a greater supply of people who "want to work in a startup" (or rather, think they like the whatever idea they have in their head of what a startup means) than there is demand for early stage employees. So any founders who might have something to hide will have their pick of people to fleece. They can easily pass on anyone who asks the the probing questions about the real value of the company and just wait for a shmuck to come along who doesn't ask.

What can we do to educate the general populace enough to dry up that pool of shmucks? In the long run, the way things are has to be terrible for investors, too. They put their money into founders who aren't being up front with their employees, and probably not getting the best employees because of it.