Companies plus VCs do it to employees all the time too. You often get told in joining “you’re getting x% of the company with back of the envelope calculation if we sell for y that would be worth x% of y”, but few founders are honest about the whole “except for the fact that by the time we sell you’ll probably have been diluted in so many rounds that it’ll by nowhere near x%” part.
Especially if the company struggles and has down-rounds, and even more if the company introduces classes of shares with preference etc. they also generally won’t sign a contract that protects employees from that ever too, so you’re not at the negotiating table, you don’t provide any capital and the only reason they have not to completely screw you is if they want to retain staff.
Even if it’s looking pretty, the final round can involve a certain amount of mathematical trickery.
Especially if the company struggles and has down-rounds, and even more if the company introduces classes of shares with preference etc. they also generally won’t sign a contract that protects employees from that ever too, so you’re not at the negotiating table, you don’t provide any capital and the only reason they have not to completely screw you is if they want to retain staff.
Even if it’s looking pretty, the final round can involve a certain amount of mathematical trickery.