For every opening at a start up like this there is another one at a start-up that pays market rates, offered comparable benefits and gives a fair piece of equity (realizing that there is a tension between salary and piece of the pie).
Hopefully once you're passed 5 employees you have at least some of your shit together. Otherwise it's hard to recruit employees.
What are "market rates"? As far add I know, most startups can't compete with Google, Facebook, Microsoft or Netflix on salary (plus bonus). If market salary is what big cos like Cisco and oracle are paying the I guess some startups pay market rate for a software engineer. But assuming I'm talented enough to join your startup, I don't think it'd very accurate to say I'm being paid market rate when I could get a lot more somewhere else.
Hopefully once you're passed 5 employees you have at least some of your shit together. Otherwise it's hard to recruit employees.