TLDR: dilution is a thing and investor incentives are not always aligned with founder, when it comes to early exit opportunities.

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But...

I don't think there are really a lot of opportunities to exit at $38m in the early stages of a startup, even if your valuation says it is possible on paper. There just isn't much of a market for companies at that stage of growth.

Imo, the more likely scenario is for a startup to either 1. fail to raise and run out of money, or 2. Become self-sustaining, but never successful enough to achieve a meaningful exit for the founders or investors, basically a "zombie" company that may never exit.

In the second case, it is the investors that get screwed, as the founder has made a nice lifestyle business out of their investment. I think most investors realize this is one of the outcomes though, so "screwed" is probably too harsh of a term to use to describe it.