I think you have to approach the dollar/equity concern differently if you're an investor or a candidate for employment. An investor typically has some additional amounts of control and influence on the company and has a preference on returns, an employee is entirely passive and secondary. When it comes to an employee candidate investing and committing a period of time , I don't think you can just translate a dollar amount to equity - i think you have to think more strategically.
You either take a startup job for experience or money. Unless you're one of the first 5-10 people in the door and grabbing at least 3% equity, there's usually not any decent money to be had.
Here's a typical example: The startup did an angel round (300k) and Series A (1.5MM). They need to expand and want to hire someone who would have a market rate salary at 200k. Because of cashflow and burnrate, they're capping salaries at 80k, and making the reset up with equity. They offer the person a package that has x% equity as a make-up , and there's a lot of fancy justification for how much that is worth and what a great deal it is.
If you do a pretty simple financial model, you'd see that over a 4 year period ( because your equity vests ), you're comparing 850k in salary ( raises ) against what will likely be 500k from the startup ( they'll take a while to bump you back up to market ). That leaves a deficiency of 350k that the equity must return, just in order for you to make market rate.
With only 1.8MM in the door, before any exit the company will almost definitely do another round at 5-10MM ; and most likely do another 10-30MM round after that. Let's assume a 25% dilution across 2 rounds, which leaves you with .56x. The founders claim a 20BN market opp and a 2BN company, but an IPO is very unlikely and similar companies have recently sold for ~300MM to many of the top "big internet" acquirers. Passing 300MM is highly unlikely, hitting 300MM is very unlikely, hitting 150MM is a more realistic "home run". So you're looking at 150MM - 35MM ( preferred stock ) = 115MM pool. Your magic breakeven number is 350k, which is roughly .3% of 115MM... which roughly translate to a .54% initial grant -- and that's just for your options to dilute to a market rate. One would think that, for taking a risk on this startup, you'd be getting some sort of a reward. On top of that, your options aren't liquid - virtually every agreement mandates that they're non-transferrable and non-sellable; you're stuck with them until an exit. On top of that, you're bound to the company for at least the 'cliff' period.
Outside of founders, I think options are largely a shell game. They're a great bonus and employee retention tool against market (or near market) rate salaries -- but far too many companies will propose a compensation package that mixes significantly scaled pay with an equity grant that is just silly.
I've seen grants proposed based on a figure or a dollar amount - e.g. a certain hire should get 2% vs. granting 120k in stock in exchange for giving up 100k cash off market salary. when it comes to the second scenario, i rarely see companies that pay scaled salaries give people market rate a year later. so what happens on year 2, 3, 4 ? if you're on a 1 year cliff, with the expectation that you'll be back on a full salary after 1 year, and 10 months in the CEO says "sorry, you'll need to stay on scale" -- how should that affect your vesting?
I don't have answers to those questions -- 10 years ago I didn't think of them. But as I get older and think about mortgages, kids, etc... and see many people put into awkward positions because of startup jobs, those points really stick out in my mind.