Unfortunately, they weren't acquired for enough money to sufficiently offset VC liquidation preferences. To mitigate this problem, the company and its acquirer

Unfortunately, they weren't acquired for enough money to sufficiently offset VC liquidation preferences. To mitigate this problem, the company and its acquirer created an incentive pool to create a fairly decent "earnout-style" return for existing employees. Former employees holding common stock? Zilch. This happened to me at the first startup I worked at. I lost $18K, which was about half the money I had at the time. I don't know what to tell you. My other companies had reverse vesting... but those ended up being worthless as well. My new rule of thumb is to not spend more than 5% of my cash reserves on an options exercise. (I have a lot more cash now, so this could still be a significant exercise)