How to correctly value your startup job offer

I've recently had a few conversations with friends and colleagues about whether a potential new job at a venture backed startup was worthwhile given the stock options, bonus structure, benefits and salary provided. In all of those conversations, I was surprised at how few people actually applied proper math to evaluate their offer.

It’s common wisdom in the Bay area that working for a startup is far superior to working in a large corporate environment. You're given more freedom, autonomy and responsibility often with the great advantage of reduced salary, increased stress levels, inferior benefits, longer work hours and a promise of winning the lottery via stock options. If you didn't pick up on my sarcasm, then you should probably stop reading at this point.