For some reason, no matter how many times we hear there's no free lunch, people still want to believe, like they want to believe in unicorns and hitting the Powerball. But it's beginning to look like many believers could get a harsh wake-up call this year, as a different kind of unicorn--overvalued tech startups--falter and their employees grasp the perils of the world they've entered.

What happened at one former unicorn, the mobile-security startup Good Technology, could be just an early battle in the ongoing "unicorn wars," according to a column by Berkeley Law Professor Steven Davidoff Solomon in this week's New York Times. The company agreed to be purchased last year by BlackBerry for $425 million after turning down an $825 million offer several months earlier. Current market conditions suggest other companies will see a similar fate, writes Solomon, who foresees a "blood bath."

The saga of Good Technology took a poignant turn when news came out of the heavy financial toll endured by its rank-and-file in the sale. Unlike the venture capitalists who invested in Good and received preferred stock, the employees had common stock, and it was suddenly worth a fraction of its one-time lofty valuation--a fraction, even, of tax bills paid on that valuation. Some employees who had bought, sold or traded their shares had borrowed money to pay those tax bills.

You'd have to be Dorian Gray or some other heartless brute not to feel sympathy for Good's employees. Some of them have sued, alleging the company's board cared only about investors' interests, and Solomon says they could have a case.

But even feeling sympathetic, it's hard not to think, well really, if those employees had known a fraction as much about financial security as they knew about mobile security they might not be in so deep a hole.

The problem is, too many employees in these brave-new startup companies don't realize they're playing in the middle of the street. They think it's great when the company gets funding from a venture capitalist but don't consider the implications. Lured by the words "stock options," they're like that starry-eyed guy in West Side Story--they think it's "All the beautiful sounds of the world" in a single phrase. They go home and tell Mom and Dad, "Hey look, I have stock options." But most of the time it doesn't mean a thing. Maybe somebody will stand you a drink at the bar, or you can stand somebody else a drink--maybe.

The fact is businesses go bust 90 percent of the time. Somebody should print that on a bumper sticker to remind everyone. And if the startup goes bankrupt, everyone loses. It's pretty straightforward, but people don't want to think about that. They don't take the time to understand the company, the financing, the management. They want to believe what they're told. They want to believe they'll be the lucky few who cash in those stock options for a lifetime's worth of adventure vacations.

Instead of luring employees with stock options, maybe every tech startup should "gift" them with a copy of Ben Graham's The Intelligent Investor. Before buying stock, make sure you know and understand the company, it's as simple as that.

At Big Ass Solutions, we offer our employees Stock Appreciation Rights, not stock options. We have set aside Stock Appreciation Rights units totaling up to a quarter of the authorized stock of Big Ass Solutions for the program. Each Stock Appreciation Rights unit is equal in value to the appreciation of each share of stock of the company, measured beginning from the time the unit is issued. How much an employee's Stock Appreciation Rights units become worth over time depends upon how much the company's valuation grows. A third-party professional valuation firm performs the valuation each year, and it's based on the company's historical and current financial performance, on its historic and anticipated future growth, on how well it has met past financial projections, as well as other factors.

Valuations can obviously go up or down, but we use the Stock Appreciation Rights program because the employee participates in the increased value of the company over time and will never be out of pocket or lose money invested in the company's stock, as can happen with stock options. The Stock Appreciation Rights plan is simple and straightforward, unlike stock options, which can sound sexy and impressive--just like beautiful music to the ears of young employees, but may end up not being worth a damn thing.

Some wise guy once said, "If it sounds too good to be true, it probably is." It's just too bad so many people have to learn this for themselves the hard way.