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Aren't more volatile valuations also better for the value seeking employees? Let's say in 1 year there's a 50% chance of the valuation going up 3x, and a 50% chance of it going down to 0.

You rest and vest if it goes up, or find another company if it fails. The ante would be 1 year's RSU and job searching for a payoff of 3 years worth of RSUs.

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Yes, from people I know, the asymmetric risk is what draws them to working for startups. Go to one, see if it 10xs quickly, otherwise go to another one.

There is also a particular group of people who seek out pre-ipo (meaning a company that is expected to IPO soon) companies, or more generally those that are about to fundraise again. Generally equity offers are given based on valuations at the last fundraising round, so playing this game properly can instantly turn $100k in paper money into $400k. Of course, doing this only makes sense if you expect the new valuation to have some kind of staying power, otherwise you won't realize those gains.

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