Separately from the pathologies of investing in startups as a mere employee, there are also more transparent mechanisms for public companies to dilute minority

Separately from the pathologies of investing in startups as a mere employee, there are also more transparent mechanisms for public companies to dilute minority shareholders or force minority shareholders to sell their stakes: 1. A company can dilute existing shareholders by issuing more shares to raise capital. That said, if a company is at a high risk of bankruptcy, the value of a minority shareholder's diluted shares may be worth more than the pre-diluted shares if the company's balance sheet is bolstered by the new cash reserves. Some recent examples: 1.1. Rolls Royce recently performed a rights issue where existing shareholders were granted the right to purchase additional shares in the company for a particular price [RR]. Shareholders who do not want to be diluted need to pony up more cash to exercise the rights or otherwise buy additional shares to compensate for dilution. 1.2. Telsa raised an additional $5b cash by issuing more common stock on the market. [TSLA] If you were a Telsa shareholder with a 'buy and hold' perspective, if you believe that the current market price of Telsa shares under estimates the true value of those shares to you as a shareholder, then this action reduces the value of your shares. Conversely, if you believe the current market price of Telsa shares massively over estimates the true value of those shares to you as a shareholder, then this action might increase the value of your shares (e.g. the value of your claim to future earnings is reduced by dilution, but the tangible assets per share of your diluted shares may increase due to the additional cash reserves). 2. In some cases, a public company can be acquired and minority shareholders can be forced to sell their shares through a squeeze-out [SO], provided a majority shareholder owns at least 90% or 95% of the company (depending on jurisdiction). It might make sense for a majority shareholder / acquirer to do this if they believe their private value of owning the entire business is higher than the current "fair-value" market price per share, and they can force minority shareholders to sell at the current market price. In the worst case this enables majority shareholders to take advantage of temporarily depressed market prices and lock out minority shareholders from participating in future gains if the company's situation improves or is turned around. One arbitrary current example of an upcoming squeeze-out is the situation with hunter douglas group [HDG]. [RR] https://www.ii.co.uk/analysis-commentary/rolls-royce-rights-issue-all-you-need-know-ii513777 https://www.ii.co.uk/analysis-commentary/rolls-royce-rights-... [TSLA] https://www.sec.gov/Archives/edgar/data/1318605/000119312520312218/d25283d424b5.htm https://www.sec.gov/Archives/edgar/data/1318605/000119312520... [SO] https://en.wikipedia.org/wiki/Squeeze-out https://en.wikipedia.org/wiki/Squeeze-out [HDG] http://investor.hunterdouglasgroup.com/news-releases/news-release-details/agreement-recommended-all-cash-offer-eur-64-share-all-common http://investor.hunterdouglasgroup.com/news-releases/news-re...