Let's say investor puts $1M with x2 liquidation preferences into company valued $3M pre-money (25% equity post money). Company then gets acquired for $20M. Investor gets $2M+$4.5M=$6.5M, rest get $13.5 (of which a much larger part usually goes to founders, and a small part to employees - e.g. $12M to 2 founders, $1.5M to 15 employees)
If they put $5M with x2 into company valued $5M pre-money, and company gets aquired for $20M, investor gets $15M, rest get $5M. Employees will often get a nice signing bonus from it, but the only one who can have a potentially life changing event is the founder.
He's right about it being historically the case that being a startup employee is a bad gig.
I honestly think the value proposition for startup employees has to come down to risk appetite, the quality of the team you're working with, and getting to work on interesting problems.
Any kind of pure economic calculus that properly accounts for risk is going to favor established companies if you're good at the career game.
Let's say investor puts $1M with x2 liquidation preferences into company valued $3M pre-money (25% equity post money). Company then gets acquired for $20M. Investor gets $2M+$4.5M=$6.5M, rest get $13.5 (of which a much larger part usually goes to founders, and a small part to employees - e.g. $12M to 2 founders, $1.5M to 15 employees)
If they put $5M with x2 into company valued $5M pre-money, and company gets aquired for $20M, investor gets $15M, rest get $5M. Employees will often get a nice signing bonus from it, but the only one who can have a potentially life changing event is the founder.