Here (Bay Area) people usually don't apply for jobs, specially jobs at startups, unless they're really into the products/team/tech/... Even old-school walking-dead companies like Cisco/IBM/HPE pay way better than most startups in term of cash compensation. And given the high risk of failure, startup should sell itself hard to attract talents.
I also found those questions are normal, far from being arrogant.
Good software engineers have options, if they're not working somewhere that offers FAANG money it's probably because they value things other than money such as a good mission, small team work environment, good management, etc.
As a rule, your company can't pay FAANG salaries, so if you want good engineers you need to sell them on the other aspects of working with/for you. There's simply no reason for them to take a bigger risk than they feel comfortable with on your company given the current market for strong engineers.
You may not like that, that's fair, but other CEOs will answer these questions and they're competing with you for that talent.