My advice to people who want to work in a startup is always very simple: Ignore any equity.
If you'd take the job without any equity then take the job. If the equity is part of your reason for taking the job, you probably shouldn't take it.
Base rate neglect[1] means we are terrible at evaluating the probability of equity being valuable. For every story about someone making millions out of their equity when the startup they're working for exits there are thousands of stories of people who walked away with nothing but a few years having fun solving challenging problems. That is the reason to work in a startup, because that is the definite, concrete thing on the table. If you want to make millions in software, get a job writing code at a bank and invest your salary.
If you'd take the job without any equity then take the job. If the equity is part of your reason for taking the job, you probably shouldn't take it.
Base rate neglect[1] means we are terrible at evaluating the probability of equity being valuable. For every story about someone making millions out of their equity when the startup they're working for exits there are thousands of stories of people who walked away with nothing but a few years having fun solving challenging problems. That is the reason to work in a startup, because that is the definite, concrete thing on the table. If you want to make millions in software, get a job writing code at a bank and invest your salary.
[1] http://en.wikipedia.org/wiki/Base_rate_fallacy