As an employee, your short-term cash flow generation is tied to the continued health of your employer. If a large portion of your net worth is tied to their stock, you're magnifying the impact of a secular or firm-specific shock should one occur. (This is, relatedly, why I'm not a fan of buying the stock of an employer in a company-sponsored DRIP or IRA. You've got plenty of exposure to their future already without buying more of it with your own money.)

The explicit understanding among professional investors is that 90% of all shares of early-stage startups are worthless. It seems more than a little self-serving for professional investors to tell employees "While our general partners would laugh us out of the room if we suggested betting the entire fund on a single investment, even if we thought it was a sure thing, you are going the be the lucky ones and you should certainly have 99% of your net worth tied up in the illiquid shares of one particular company."