Just read an interesting article on Silicon Valley Watcher, describing the economics of a vc-backed exit:
“…Here’s how the math works against EVERY employee at an overfunded startup – take the mint deal for example: $170M exit (maybe $70 or so is future perf related so that leaves $100M), even without liquidation prefs, the employees get basically nothing. $40mil VC = maybe 60% of the company, 20% for the founder CEO, 3% each for the next 5 guys. That leaves everyone else sharing $5mil to vest over the next 4 years. And even that’s skewed for a few people. So with the biggest VC exit of the year, the employees are basically vesting a $20k annual bonus. gee thanks. Huge VC rounds are only good for people who own big, early, preferred chunks already.”
Of course, that kind of exit is pretty rare, especially lately. And usually there are a few founders splitting that 20%. Plus, of COURSE there are liquidity preferences up the wazoo, so the pie gets reduced (VCs get their investment amount off the top, or sometimes 2x that amount, before the pie gets divided among them and the others).