Henry Ward, the CEO of eShares, recently published a pretty interesting essay on Medium about what a terrible job most startups do when it comes to keeping track of options and equity grants, and how employees at these companies suffer because of it. I suppose we should not be shocked that when people who have never run companies before, or in some cases have never even had jobs before, are given millions of dollars and charged with handling some rather complicated and arcane finance-related chores, things might go off the rails.

Ward paints a picture of startup CEOs losing paperwork and generally looking like Ashton Kutcher and Seann William Scott in Dude, Where’s My Cap Table? To be sure, Ward’s company is in the business of doing finance work for startups, so his article is kind of a sales pitch for his company and maybe should be taken with a grain of salt.

Nevertheless there were a few lines that really jumped out at me, most notably this startling little factoid regarding employees who leave startups:

Less than 5 percent of employee options grants are exercised. The vast majority are forfeited and recycled back into the company’s option pool.

Presumably people do not exercise options for two reasons – either because the options are underwater and thus aren’t worth exercising, or because the process of exercising them is too difficult, complicated and confusing.

The latter scenario apparently happens more often than you'd think. Ward points out that "Most employees have never been a private company shareholder and don’t understand their options or rights." Shockingly, their companies don't do much to help them.

Ward doesn’t come right out and say it, but the point is that this doesn't happen by accident. Companies have every incentive to make it difficult for you to exercise your options.

But less than 5 percent! What this means is that basically startups have a big pile of Monopoly money that they can offer as compensation, knowing that most of the time, or actually almost all of the time, they won't have to pay it.

They can offer options to one employee, then get them back and give them to another employee, who also probably won't exercise them, and on and on and on. Not bad!

The extra bonus is that startups use options as an argument for employees to accept a lower salary. What they're really doing is creating a cheap labor pool for themselves.

You hear a lot about the startup people who strike it rich. The truth is that most people who work at startups aren't that lucky. Most strike out, and not just once, but again and again.

There now has emerged in Silicon Valley an underclass of modern-day tenant farmers, sharecroppers hopping from one field to the next, always being underpaid but hoping that in one of these fields there will be a box of buried treasure.

Most – 95 percent, apparently – never find it.

It's a neat trick, and the VCs have accomplished this by creating a mythology about the joys and wonder of startup life. You're a hero! You're brave! You're in charge of your own destiny.

You can see that sentiment expressed in kooky VC-funded videos like this one, where cheery people sing about how working for a startup is so much better than “getting down and out at some Fortune 500 company.” (See the two women from Birchbox at the 3:06 mark.)

Right on, man! Why be exploited by some big faceless corporate giant when you can instead get exploited by some shiny happy little startup? There is, however, one good thing about working for those big companies: You get paid in actual money. I know it's old-fashioned. But there's something to be said for that.