This post speaks well about startups done right. It barely says anything about startups done wrong. Likewise, although the examples are much fewer, there are big companies done right and big companies done wrong.
However, because working at a startup is gambling, you have to treat it as such. If you can't live with losing out on salary you could've made at another job, you shouldn't work at a startup.
I agree, working for peanuts is dumb. But 20%-40% less than what Google offers is hardly poverty -- it's still much more than what most non-engineers make out of college.
Forward many years, and I have my own thing going and I appreciate the failed startup experience because it gives me some framework on which to base my decisions. And I hope I'm doing things better... (and that a few years from now that junior dev we just hired will do a better job with his/her company!)
It takes toll psychologically. There's that nagging feeling that "had they listen to me, we wouldn't fail this bad" for a while depending on how slow/fast you can move on.
Wasted [time & money]: you lose money, you lose time. Could've done something else, build a career, street-cred, resume, and do something else as well.
The positive part of working at a failing start-up is about opening your eyes that start-up isn't as glamour as what people perceive it to be. It makes you not wanting to work for a start-up ever again unless it is yours. So I'm not saying it kills your entrepreneurial spirit, but it does kill your youth-risk-taking-high-flying mind.
Also, you can learn a lot from you failures.
So while you may lose out on time and money, you gain other things too. Depends on if that trade-off is worth it.
It's almost as if people will get jeered/booed for working in establish companies.
What do people love? Building software? you can do that anywhere though, doesn't have to be in a start-up. I think people tend to be choosy these days: they want to work in a company that is young, hip, quirky office layout/design, get a lot of attention, and use cutting edge (sometime unproven) technology.
Don't forget that there are plenty people out there that build software on their free-time (i.e.: side projects).
I'm having a little bit difficulty to understand of what you can learn in a short amount of time that you can't outside start-up. If the start-up moves too fast, you're bound to cut some corner, you're bound not to use the best-practices, you're bound to "hacked it up". I think we all have been exposed with the Mythical Man-Month book that explains some of the properties of software.
And if it moves in an even faster speed, I'm not sure how you can learn so much more as you'll get tired and just go to sleep after work.
Yes, you can definitely learn a lot from failures, assuming you know what went wrong. Not a lot of people know what went wrong though. Some people would stick it to "bad luck" as oppose to "we don't have enough skill to pull it off".
There's some truth to the old wisdom of learning from failures, I'm not dismissing any of it. There's that difference between actually experiencing the failure and learning from other people's failure. Sometimes it instils discipline and better work ethic.
4) You can also be removed from your role a lot faster and be forced down if the team (or worse, the investors) feel you're not ready and they feel the company requires adult management. For some people, it's true. But in some cases, you can get really buried because of petty issues, or in worst-scenario cases, forced out and left hanging to dry. You may come out of the experience having learned a lot, but you may also come out of the experience very bitter. See recently submitted article about Khalid Shaikh, regarding YouSendIt, Noah Glass of Twitter, Eduardo Saverin of Facebook, etc. Yeah, all of these guys probably made big mistakes and probably didn't deserve to be one of the senior guys. But the point is that they also didn't get a lot of help to develop themselves, whereas at a big company, the structure is in place to help develop people who need it (not always, but more often than in startups where everyone has to pull their own weight or die). Another recent alleged example is Naveen Selvadurai of Foursquare, though that guy has done a good job of taking the high road if it's true: http://www.businessinsider.com/naveen-selvadurai-tried-to-fi...
5) The level of transparency and all the good stuff that comes with it is all dependent on the level of integrity of the startup's leadership. There are lots of stories of founders who lie, mislead, and misuse the startup's money.
6) You can help shape environments, but it is also a natural psychological event that your environment shapes you. If your founders are domineering, arrogant, and generally assholes, it will be hard for you to influence the company, especially since most of the early hires will either be similar or easily cowed into groupthink. If you're not up to the task of standing up, you either become one of the cowed sheeple or get pushed out. It's sad if an startup's (or any organization's) culture is like high school, but it can happen.
7) I'd say it really depends on the leadership's philosophies. If it's a business type who's like "I'm the CEO, this is my leadership group, and you guys are just code monkeys", I'm betting you probably won't see this kind of culture where everyone can be involved in the hiring across the entire organization.
8) Already addressed somewhere in these comments.
9) Politics can exist in smaller companies too. And when the group is as small and tight-knit as startups are supposed to be, if the politics exist due to poor leadership and poor culture, it will be an even more painful experience than in a big company. After all, in startups, you can often spend all your time with the team when it's crunch time. In big companies, more often than not, you have the option to go home and leave work at work. It can become a lot more personal in a startup if the culture is bad.
At a startup my friend worked, he was one of the best engineer on the team and thus the founders wanted him to take on more work in return for a bigger bonus. In the end they did not make enough money to pay the promised bonus .. turned out the founders knew this all along but still kept mentioning the said bonus.
I've been at Fusion-io for a little over 2 years now, and I worked at HP before that, and I was nodding in agreement with this whole post.