Clouded Judgement: The Irrational Equity Valuation Game in Startup Hiring

The article critiques the emerging practice of early-stage founders raising at increasingly high valuations primarily to offer larger nominal equity packages to attract talent, despite the fact that higher valuations increase dilution and reduce actual upside for employees. The author argues this behavior, while rationally motivated, mirrors 2021's hype cycle and will eventually collapse when companies fail to justify inflated paper valuations, leaving employees with worthless equity.