[beagle3]

Let's look at the numbers:

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.