It’s really unfair whatever you do, and right now there is no good solution. Partially because there is no good way of understanding the value of an employee.
This is the perception among many startups, but I think this is more perception than it is reality.
Exceptional engineers are several times more valuable to most startups than an average engineer, but almost all will hire an average engineer for $115k before they hire an exceptional one for $175k. There's no rational basis for this, but it is the path of least resistance. You won't need to defend hiring an engineer for $115k to cofounders or investors.
This is counter-intuitive, but the solution is to actually pay more for remote engineering jobs. When you do this, you're widening your talent pool to the entire world - and then you're selecting from the very top of the pool. We've been doing this for years, and it's been one of our most significant competitive advantages.
I also agree with your solution, but not sure how practical it is short term. Long term that is probably what will happen.
The really hard part is in starting new projects, or maybe that is just hard for me.
I think a lot of the discussion is assuming FAANG rates, and realistically, exceptional engineers at those companies should be getting paid absurd, outrageous amounts of money. However what you're talking about is a smaller company, and sure, you can hire two average engineers for only 2/7th more money than one exceptional person.
There is just so much money splashing around in investor driven companies right now because of cheap money that I don’t see it working out.
I also think investors provide more then money that is hard to overcome. They have a network you will only get access to if they get cheap investments and for some type of companies that is necessary.