And be sure to check out MUME (Multi Users in Middle Earth) as well! It has a graphical map that shows your location while you navigate the world of Middle Earth and join the epic battle (PK) between the free peoples of Arda and Sauron's minions.
If your definition of 'pay out' is 'deliver cash compensation at or beyond market rate with very high probability and consistency over a period of years' then yes, most definitely, working at an early stage startup is a poor choice.
When you step back, this is really inescapable: large, established companies are more stable and predictable than small, unproven companies. Accordingly, the forces of the market will provide the large/established companies with greater compensatory resources in exchange for that confidence and predictability (some way or another, we are all willing to pay extra for a guarantee, or as close to a guarantee as the market allows). There are exceptions, of course... but the general pattern is clear.
But indirectly, you raise an important point: many early stage employees (especially 'kids') do not fully understand how equity or funding works ... and they end up believing in the false idol of their basis points and wasting many years of their lives.
I've never met anyone working as early stage employee who had a get-rich-on-liquidation mindset and did not end up burnt out or extremely frustrated in the long run (my own experience very much included). To survive (even /enjoy/) early stage, you must build a personal satisfaction model that's more than just cash (learning? networking? friends? intellectual stimulation? fun?). It's very possible, but it's a huge shift in perspective if you're coming from a golden-handcuffing big tech co...
https://mume.org/
Here's a (dramatized) YouTube video of a few epic battles:
https://www.youtube.com/watch?v=d-Ax1MZlDoE
And here's a stream of us fighting one of the bigger bosses in the game (a huge spider in Mirkwood):
https://www.youtube.com/watch?v=OHnqKQdLzoc