if at the next financing round your company doesn’t get valued as highly and you have a “flat” or “down” round, all kinds of nasty provisions that protect investors’ rights can kick in. In many cases a new investor will demand a “recapitalization” - this is fancy-speak for tearing up the cap table and negotiating who should own what. Hint: if you’re a former or early employee, you’re not going to end up with much. The results can be unintuitively punishing: in one recent example, Gomez.com sold for several hundred million dollars and the founder made a few thousand dollars. He had left before
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