Very briefly: for employees to have a good outcome, the company must be a success relative to the funding. I'd love to say that founders are in the same boat as employees, but it's not true. Unethical founders can engineer situations where they alone get millions of dollars and no other employees do. That can be somewhat justifiable (eg taking $1m or something off the table in a round B for a company that eventually fails), or it can be poisonous (Adam from wework getting north of a billion in cash for a company that will probably go bankrupt).
With respect to the article:
$100m exit on $10m funding? Employees should do well. $100m exit on $110m funding? You can't expect a good outcome for the employees in that case. They may get some sort of retention bonus in an acquisition, but that's about it.
Another thing all employees should know is that, as a rule of thumb, you need to triple your valuation between funding rounds. That is not as true late, ie when you have enormous $100m + rounds that are raised in lieu of going public with more of a debt structure than an investment structure.
You should be skeptical of companies that have raised too much money. Eg if a company raises a $100m round B, they are basically saying their metrics have to justify a multibillion dollar valuation.
Anyway, there's a bunch of good links, but (and I'm a company founder), I'd tell you to keep a couple crucial things in mind:
First, don't work for dodgy founders. I understand that's not easy for you to evaluate, but there are ways you can figure out. eg have the founders hired lots of people they're previously worked with? That's a good sign.
Second, if you want a good outcome, the company must be growing. At a startup, you are comped on growth. You should be unafraid to fire founders and execs (by quitting) that are unable to grow the company. That's not to say quit at the first rough patch, but every year when you are deciding if you re-up for another year or not, you should evaluate the metrics over the last year.
Third, understand the runway and the metrics that get you the next round or an exit. Be unafraid to demand to know all the above, and expect positive performance on all those things.
I think the intent to say is that if people they previously worked with are willing to work with them again, that is positive because it shows that previous employees/partners haven't been screwed over.
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Predates KISS's and SAFE's and the round sizes are a bit out of date, but the you-get-nothing scenarios like liquidation preferences and down rounds are still the same.
