[jiveturkey]

1) I wouldn't call it "very" fair. VCs can (and almost always do?) also have a veto on such sales in the terms, so they don't need the preference to protect their investment. Which is more fair?

2) You missed the 3rd case, sometimes the business is simply a bad one (like the example in TFA), or all the oxygen is getting sucked out by the new shepherd dog, eg right now with AI. The business can die right then and there, or the founder can take the equity on the only terms they can get. Given that any decent founder is drunk on their own kool-aid, and believes their fortunes will change in just 1 quarter or even 1 year, they just need to ride it out, it often seems like a good idea, and what's the difference? Die now or die later. At least take a shot at it.

IOW it's not all villains on one side and incompetent heroes on the other.

The real downside is that now you're working for the VCs. You kind of were the entire time -- that's built-in -- but it's more pointed now. If you make it to IPO none if it matters ...

As the theme of TFA's website goes, build a "fundable" startup. Easier said then done, of course. Like so many of such self-help in the startup world, the entire site is a bit of a lie, selling false hope. They even position FanDuel as some VC abusive situation (thus selling themself as the savior), by talking only about the huge amount of money, "half a billion" dollars. No mention at all of how much FanDuel raised ...