Yeah I found that part especially wrong too. His article is all about fairness, and it seems especially unfair to me that someone would work and have a huge chunk of compensation deferred with a nontrivial chance the company never pays.
If I work for someone, they need to compensate me right away. This may mean I receive an option grant that is eventually worthless, but at least in that case I would have had an upside to my risk. The IOU has no upside but has the same possibility of worthlessness.
Made up numbers, but say you get 500,000 from investors. And the going rate for engineers is 100,000. Two founders can take a salary and hire two, maybe three, employees. If they can afford not to take a salary, they've doubled their staff size. Since each one of them owns 25% of the company, it may be worth the risk to them. It's obviously not worth the same risk to the first round of employees, who each end up with 2.5% of the company.
If I work for someone, they need to compensate me right away. This may mean I receive an option grant that is eventually worthless, but at least in that case I would have had an upside to my risk. The IOU has no upside but has the same possibility of worthlessness.