You have to think long and hard if the company will actually be able to be sold, or go public.
Venture capitalists are professional company evaluators. They probably only fund 1 out of every 10,000 applications, and of those, of every 100 or more, do they get their money back.
So you have to look at your business evaluation skills and know if it yours are better than venture capitalists, who have seen it all, and have many expert evaluators, and the fact that they have a very small fraction of their companies making money.
Those companies that try to get venture capital and can't, probably are not a good bet. Now, there are probably some companies that couldn't get venture capital, but succeeded anyways, but that's not the way to bet. So if they hav venture capitalists, I'd ask them if they have any venture capital companies invested into their company, and what are the names of the venture capital companies. Then you go to that website and learn about those venture capitalists, and if they have a track record in the type of company you are considering. If not, then look askance at it. If it is one of the huge venture capital companies, that is better than a small one that doesn't normally invest in the type of company that you are considering. Also ask if the company you are considering working at has tried to get venture capital in the past, but were not able to. That is bad news.
The reason for all this is that if a company is not viable for either an acquisition from a larger company, or to go public, which is most of the time, then the stocks are 100% worthless. It will all be a waste of your time, especially if you take a lower salary for the stock options. You will lose a lot of your potential income during that time you are at the start up, if you are giving up up-front salary for stock. This is no fun at all if the company doesn't get acquired or go public. You probably will chalk it up to a "learning experience" but I don't agree with that. Because you just learned from what I just wrote above, and below.
Additionally, worse than the company's product or service itself...don't count out the worst thing of all - the incompetence of the founders and management. People can talk a good game, but the sh-t I've seen. Just think about companies that you have worked for and the incompetence of some people, managers and others. People think that companies are in it to increase the value of stock for the shareholders, and in some cases it just might be, and while everyone says that it is the reason, there are almost always hidden agendas. Many managers and owners are in it for the ego strokes, or power hungry, or have a horrible idea of the valuations of the company and don't sell at the best price, and actually prefer to have the whole thing go down in flames if their ego is not stroked. You will die a thousand deaths in this case, because you see all your hard work, and the stock you had planned for, go kaput, when it should have and cold have been acquired or gone public. There are thousands of these stories. One of those stories is about DR-DOS - the guy who owned it, Gary Kildall, went out to fly his airplane when IBM came calling to buy his OS. He wasn't there, so they went to Bill Gates, who actually bought MSDOS from another company for $30,000, licensed it to IMB,and the rest is history.
Finally, and I did read this somewhere a few years ago, someone correct me if I'm wrong, is that if you get 50,000 shares of stock options with a exercise price of $25 per share, which is $1.25 million, and when you are ready to sell, if the price goes up to $75 per share, an increase of $50/share, that would be worth $2.5 million again, IF you can sell them for $75 per share. But, IF the price happens to go DOWN to $5 per share for whatever reason, that $20/share loss, and a value of $250,000 on your shares at $5/share. So, when you decide to leave the company when this is the situation, I believe you generally have 90 days to exercise for those options. When you sell the options, I'm almost positive ( and someone correct me if I am wrong) that you then realize the gain as far as the IRS is concerned, but they use the original price as the basis and you will have to pay taxes on the $1.25 million of the 50,000 shares with original price of $25/share. So, most employees leave their stock behind and don't exercise their options, because they would have to pay taxes on $1.25 million, with only a $250,000 that you can get from selling them, so you immediately have to pay taxes on $1 million, which is $350,000 or whatever. Maybe I'm wrong on this, but somehow, since it is in the interest of the company to screw employees, you can get really, really screwed when you sell your stock.