> The employees didn't pay for their options because the options were "out of the money" and the employees had various confirmations that the shares would not b

> The employees didn't pay for their options because the options were "out of the money" and the employees had various confirmations that the shares would not be worth anything, but they still had the choice to. That’s a side effect of the problem, not the cause of the problem. Why did the employee options expire worthless? Because they were issued at one valuation, then the investors changed the valuation to $0. Yet the company and technology didn’t change. In fact, it kept operating with the same brand, same customers, and website. The investors and founder both dipped the valuation to zero because it was in their best personal interests, dropping employees with options in the process. That’s why I framed this as a cautionary tale for employees looking to help startups. This wouldn’t have been a big deal if the company simply went through the normal failure process where the IP was sold on the open market in the normal process. Even if the founder had bought the company IP back for $1 if no one else wanted it, that would have at least persevered some appearance of fairness.