CJ it happens frequently enough that 'it's a thing' and it happens all the time. Usually in conjunction with a new round, but not always. The company will do

CJ it happens frequently enough that 'it's a thing' and it happens all the time. Usually in conjunction with a new round, but not always. The company will do a massive 'down round' - even lower than what they really want, bring on new investors. Then issue shares to current staff founders. That is de-facto like handing over equity from previous staff to new investors - you could almost do the math for how much 'old employees' stock was sold to new investors wherein said old employees didn't get a dime. It's generally going to happen in negative situations, but that happens a lot. Edit: and it's not something your ever going to hear about, it's obviously not something leadership wants anyone to know about. Even 'former employees' who were washed out may not find out - how would they? They're not entitled to be notified upon new issuance of shares.