Equity
mattmaroon.com
mattmaroon.com
"If it's some sort of enterprise software, and they have massive experience and connections in the industry they plan on serving, as well as the ability to sell, and possibly a line on funding, 2% might be acceptable"
That would just raise the value of their idea and their contribution, not that he should be offered 2%. It's obvious that their value is zero if there is no product built. That could raise his contribution to even more than 33% and not drop it to an "acceptable" 2%! It's ridicilus. If they are so sure about their idea then they should just pay someone to build the software for their valuable idea, which I am sure is as much naive as their attitude.
And from http://news.ycombinator.com/item?id=73708, someone can make the assumption that there is no salary. Which is why he should be considered founder and no employee.
It is really offensive and provocative for someone to be offered only 2%!
They basis of your thoughts is based in wrong assumptions.
Other mistakes:
"There aren't many professions where someone who is great at his job would be preferred over 10 people"
The characteristic of a profession for someone's capability to worth a lot more than the sum of N others combined, is not restricted to only programmers or limited to a small number of professions. The correct way to say it, is that the number of the people who are way better than others is a lot less than those who aren't.
"So if you think lack of knowledge market rates for developers is the case, you might want to explain to them that they're shooting themselves"
If they do lack the knowledge of "market rates" they should be kind to discuss the value of his contribution. This show that they are naive and want to take advantage of someone. Just this by its own is enough to ignore them because amongst others negatives its an indication they dont evaluate their enviroment, their assets and people, So, why trust their contribution?
"They might simply be unaware that they're offering such a low amount that they're potentially hurting themselves by ensuring they end up with a mediocre developer, if any at all."
If they were unware of the value of writting software they would probably try to pay for the software as much less they can. But instead they went to him and tryed to "hire" him thinking they can fool.
"So try explaining. It's possible, albeit unlikely, that they'll realize how much they need your assistance, and if not, at least you tried to do them a favor."
They know they need his assistance otherwise they wouldn't have gone to him.
"So I'd tend to say no, unless you really had a lot of faith in those two guys. I suppose you'd have to have some to even consider the deal,"
Having faith to guys that treat you innapropriately is error prone, especially for a startup.
Oh, and it gave me a headache reading all those undeterministic values of the words you are using "not so many", "how big", "that bad either". Compared to what? They just added confusion to the point you are trying to make.