I agree this happens - a lot. But if it's a matter of supply/demand and engineers being worth "$0.5m - $1m" then why are we not seeing salaries for developers a lot higher?

It would be a lot cheaper for Facebook to offer good developers $500k/year + options straight up rather than spending several million to buy a startup of a few devs, where a large %age of the purchase price is going to invetors and not the developers.

I wonder if Facebook, Google, etc paid that kind of money whether we'd see more young, talented developers joining Facebook rather than creating a startup?

Or maybe companies like Facebook already do pay that kind of money to the best engineers - we just don't hear about it?