I have started multiple startups, and joined others at various times. I've also professionally traded options. I have a huge appetite for risk, but the risk/reward isn't there for most early employees who are getting paid less cash in exchange for options. You just can't take them at face value. I would say many early stage employees aren't taking appreciably less risk than the founders themselves, but at a fraction of the upside.
I've been fairly successful at it. Most companies are willing to put up with some negotiation. I've gotten a lawyer to go over the options agreements on more than one occasion, usually money well spent if you don't understand all of the contract intricacies. I think how much people are willing to put up with is directly proportional to how valuable you would be to the company, your skill set, experience etc. If you are easily fungible or at least the perception is that you are than your ability to negotiate some of the finer points will suffer.
I think most early stage employees, especially ones who are ultimately going to be injecting the IP of the company on which it's future value will be based should be very aggressive about options and salary packages. Having seen both the bad and the good, I definitely gravitate towards being cautious when getting startup offers. I also think we need to educate people more about this. I recently asked a potential employer about the strike price, and he said I was the first person to ask that question. I think that says a lot about how weak the understanding of early employees is.
