Why didn't I get any money from my startup?

There are logical arguments for both 1x non-participating and 1x participating. Using 1x non-participating as an example because it’s simpler: if a startup raises $5 million and then sells for $4 million, they traded $1 for $0.80. No enterprise value was created. Employees aren’t getting shorted because there’s no gain to allocate in the first place.

Above 1x is not at all standard. You used the word “give,” but these terms aren’t gifts, they’re negotiation outcomes. If a startup obtains multiple term sheets and/or or is satisfied with a lower valuation, they’ll negotiate better liquidation preferences. A startup which accepted a 2x liquidation preference either pushed the valuation as high as possible, obtained no other offers, or both.