I actually disagree. Once you give equity, you are stuck for better or worse. Make sure you have a vesting schedule in place and pay more salary and keep as much equity as you possible can.
S/he should get the right people and pay them what they're worth. Trying to under-pay people results in sub-par people or good people leaving. 80% of nothing is a lot less valuable than 60% of something successful. Great people are absolutely vital at an early stage.
I'm not making things up here, either. Every successful entrepreneur I know agrees with that sentiment, as does the prevailing philosophy of investors[1][2], thought leaders[3], and serial entrepreneurs[4].
I have never once seen anyone successful say to hoard your equity, especially if you're bootstrapped and cash-flow positive. Greed is a great way to kill morale.
