The real question being is there any way to change this?
Ultimately it comes down to how competitive a startup can be right now.
Venture Capital isn't prepared to stretch valuations further in lower rounds so that they can compensate better in cash.
Sure everyone could also give out better percentages of equity, and VCs can have lower liquidity preferences.
But it really comes down to the tax treatment of common stock options, versus publicly traded common stock restricted units, and ability to compensate employees.
Ultimately it comes down to how competitive a startup can be right now.
Venture Capital isn't prepared to stretch valuations further in lower rounds so that they can compensate better in cash.
Sure everyone could also give out better percentages of equity, and VCs can have lower liquidity preferences.
But it really comes down to the tax treatment of common stock options, versus publicly traded common stock restricted units, and ability to compensate employees.