Keep in mind that it’s common to have at least one cofounder. Some times more. Start with 3 cofounders and an equal split and already nobody can have more than 33% of the company.
The term “Series A” has also become kind of diluted away by a growing list of earlier rounds: Angel, pre-seed, seed, etc. It’s getting kind of funny to see how much fundraising a company can do before “Series A” these days.
Equity is a tough topic to think about because everyone expects to have a lot, but numerically a startup with multiple cofounders and multiple investment rounds and an employee option pool and equity for early hires will end up with a lot of entries on the cap table. It becomes difficult for any one person to have >20% equity very quickly in most cases.
At startups I often had to explain this to early but post-investment hires who expected 10% or more equity for themselves on top of market rate salaries. Unfortunately the equity gets spread across a lot of different parties.
Is it because they are not creating anything truly unique with great market pull?
Normal SWEs can follow this example by saving up and being willing to work for a big discount if it's their own company they're working on. That's not going to let you start a car company but for a website it might be enough.
Didn't he _not_ start Tesla, though? I thought he bought his way in, and negotiated cofounder status?
Side note, as a potential employee (and a different kind of investor) that's the determining factor in whether or not the equity vs paycut gamble makes sense.
The vast majority of tech companies that IPO have revenues of (much) less than $500M.