> If you already have a network and a decent platform to communicate with people, as well as the motivation to go at it for yourself, you're giving up a huge chunk of the company for a pittance.

But that's literally the point. You suddenly get a huge network that would help you get through the early stages.

It's certainly true that many founders would find better terms elsewhere. However, it's also true that most companies fail. So negotiating better terms usually doesn't matter nearly as much as making the company more successful. (The same rationale applies to employee equity grants)

Like you said, for people with no connections, whether just out of school or not, it's valuable.