[austhrow743]

Better value for money in compensation packages. Prospective employees value the stock compared to cash more than the company does, ergo the company gives it to them.

Theoretically the idea is that if the company becomes a unicorn and has a huge IPO and becomes a new tech giant then employees will do really well financially. OP's story isn't that. If investors got "some" money back then it was a failure of business. Probably an acquihire. So neither investors or employees got the big success payout they were hoping for because it wasn't a big success. Investors got some money back and employees got paid a salary for however many years to work on what is probably a useless product.