Yes, employee #1 is almost always the worst-off person in the company. They get to work like a founder, without the financial benefits. I've been there twice; it isn't a lot of fun.
Either found or join a company that has funding.
Either found or join a company that has funding.
That employee (we'll call her Sarah) isn't being paid to see how a startup is created; she's paying to see how a startup is created.
She's paying heavily. She's losing money in the form of a lower salary compared to equivalent jobs, and she's losing money in the form of losing free-time compared to equivalent jobs.
Sometimes, that payment is very worth it. But it's a payment.
If you don't get the same type of stock as the VCs, and under all the same conditions, it's worth pennies on the dollar at best and likely simply zero.