What do you mean by this "The real people getting screwed by these paper unicorns though are the late stage employees being sold options as compensation"?
I'm currently a student job searching and this seems pretty relevant.
I'm currently a student job searching and this seems pretty relevant.
Employees (and Founders) have common stock, while Investors get preferred stock.
Preferred stock carries with it a "liquidation preference", which basically means holders of that stock get paid out first during a liquidity event, including some multiple of their original investment. What ever is left, is divided among the holders of common stock.
If the company is publicly traded, then all owners of stock hold the same class of stock (common).