Only 0.5-1% of startups get picked for VC funding, and even less to Series A etc., so there is a bit of a weeder on that side. On the other side, with multiple top tech companies being 100K+ employees, being at one long enough to lead a team or project is not that selective.

I do agree that competing based on compensation is generally foolish, with only exceptions like being funded by the top 1% of VCs who like to compete by overspending. Hence, 50% paycut.

>> Funded co's are the top 1%, so that's arguably some $600K folks (L6) > Only 0.5-1% of startups get picked for VC funding

This is a big misunderstanding. The rate at which pitches get picked up for funding is not related to the rank of the engineers that the startup would hire. Startup engineers tend to be either younger and inexperienced or experienced, but average (i.e., not top-earners at big tech). In either case, they are risk-seekers who are willing to take lower salaries in exchange for equity with a slim chance at making it big. Startups are, generally speaking, under strict financial pressure. They usually can’t afford to pay market rate, let alone big tech (“We need the best people in the industry at any cost”) rates.

That's a hell of a claim I'd be curious to see backed up. In a sense, one of the first tests for a funded founder is hiring folks at below-market (my initial 50% estimate) who still outperform others.