My company sold for $100M and I got zilch – how can that be?

FWIW, I kind of don't believe that this question is real. Questioner clams that he is a VP but also:

> He has no idea how liquidation preferences work

> He was "told" that the company was being acquired (instead of being involved in the sale)

> No one at the company walked him through how his stock was valued, even after the acquisition. To the point that he thinks he needs to hire a lawyer.

It's a fine question to use as a lead in to explaining how stock options work, and that's a fine thing to write about. But I'd bet money that the author made up the question.

I was the third employee at a startup. I was young and stupid and thought "20,000 shares" was a lot. I worked my ass off, it was immensely stressful, but we built and launched a product. I later found out it wasn't much of a stake at all- .1% and that's even before any dilution shenanigans and all that. We took a paycut part of the way through, had our 401k contributions slashed and such.

A company in the space (but doing something different) called and made me an offer for twice what I was making. I was the lead developer by that point, had my hands in every significant piece of code, understood how everything fit together and such, and was appalled when I found out that I had such a small piece of the total pie. I demanded more, like 20x more, and they made it sound like I was asking to sleep with their wives. Then they absolutely howled that I was screwing them over by leaving right at launch- they asked me to stay for 3 months, which I said sure- if you match my new salary plus a little more as a retention bonus and to make up for some of the paycut, and again they howled at how could I do this to them...

It was a painful lesson, but I learned something very important- Do not work like you are an owner if you are just an employee! I still to this day (this was 10 years ago now) feel very taken advantage of. I was working tons of late nights and weekends, was a super fanboy of the company, at one point I was going to buy us a company logo made out of Legos to hang on our wall, and now I just cringe at the thought.

There are so many ways to lose in the startup game, just so many, its really not worth playing anymore IMHO unless you are a founder or very early stage employee with material access to the financials and such.

This is why you should get a proper salary even if you are working at a "hot startup". Were you expecting a $1m gross payout from owning 1% of a $100m company? That's the kind of gross income you'd get every 2 years of working at Googbookagramazon. Consider opportunity costs carefully.

It depends on whether your role in the company means that you are part of negotiating the deal. If you are the CEO: then probably yes. If you're an IC engineer: then probably not.

Relatedly, most of these deal terms are pretty standardized. In the vast majority of cases there aren't a lot of negotiations around liquidation preferences, only negotiations around valuations. The exceptions to the rule tend to happen for very large or late stage fundraises.

Any equity that is offered with secret terms should be valued at zero. In my experience nobody will tell you, so always go for market rate salaries.