You are missing one of the larger points of opacity as well, which is liquidation preference. Even if your company has only taken a small amount of investment money you may not see a dime of it unless it gets acquired for over $20m, as VCs are able to claim that first $20m. Every round the liquidation preference goes up and it does not take long for a $100m liquidation preference to come into effect.
Thank you for pointing this out. This is the main reason why so many engineers I know got basically nothing when their company was acquired after slaving away for years.
If you join a startup, you should either do it for the experience (lots of responsibility, wearing many hats), or as a founder. Anything less is a recipe for disappointment.
This even washes out earlier investors. I've had situations where I invested and the company got acquired, but there wasn't enough money to get back to my preference shares. Obviously common was wiped out.
In particular, when companies seem like they might go bust new money insists on healthy (2X/3X) liq prefs. As in many situations, the golden rule applies. He who has the gold makes the rules!
I've been part of two startups that were acquired, even with options for about 3% of non-Founder shares for one of them. Total value of all of those was $0.
What was valuable was the experience I gained, and rising to VP in one of them. I got a nice package from the (>$100B, SF-based, public) acquiring company. That was an instant 200% raise, and the experience I got has really helped find future higher paying jobs.
