So I guess the question is what do you look for when hiring engineers? Are there any must have skills?
I think a lot of people are attracted to the startup lifestyle because it's been so glamorized (I was). It actually really sucks, and more than likely the startup will fail. I couldn't find a single startup in SF willing to compensate fairly given that fact, because they have to "stay lean". You really have to want what the startup wants, and join for altruistic reasons - the pay is just to keep you from starving to death while you work there.
Combine no raises with a poor starting salary (which is not the norm in my experience) and indeed you would have a recipe for a bad return.
Even counting my two successes, in the cases we were bought, the parent company's stock subsequently tanked so I made very little of the difference back.